The Canadian dollar has posted gains in the Monday session, continuing the upward trend we saw on Friday. Currently, USD/CAD is trading at 1.3460. On the release front, it’s a quiet start to the week, with no US releases on the schedule. Canada will publish Wholesale Sales, with the estimate standing at 0.3%. On Tuesday, Canada releases key retail sales numbers.
US numbers were generally positive on Thursday, as the economy continues to move in the right direction. Unemployment Claims sparkled at 235 thousand, much lower than the estimate of 257 thousand. This marked the lowest weekly claims total since 1973. CPI matched expectations at 0.4%, but Core CPI came in at 0.1% shy of the estimate of 0.2%. The Philly Fed Manufacturing Index dropped to 7.6 points, short of the forecast. On the housing front, Housing Starts remained unchanged at 1.23 million, above expectations.
USD/CAD posted sharp gains on Thursday, following Fed Chair Yellen’s appearance before a congressional committee. Yellen did not explicitly acknowledge that the Fed would raise rates at the December 13-14 policy meeting, but she did say that the rate hike would be “relatively soon”. Yellen make no mention of Donald Trump’s potential policies, which could include greater fiscal spending, as she reiterated that future rate hikes should be “gradual”. The odds of a rate hike next month currently stand at 95 percent. Commenting on Yellen’s testimony, Jonathan Wright, a former Fed economist, summed up market sentiment – “a rate hike in December is a done deal, barring a significant surprise in the next jobs numbers or in financial markets”.
Monday (November 21)
- 8:30 Canadian Wholesale Sales. Estimate 0.3%
Tuesday (November 22)
- 8:30 Canadian Core Retail Sales. Estimate 0.6%
- 8:30 Canadian Retail Sales. Estimate 0.7%
*All release times are EST
*Key events are in bold
USD/CAD for Monday, November 21, 2016
USD/CAD Nov 20 to Nov 22, 2016
USD/CAD November 21 at 8:00 EST
Open: 1.3508 High: 1.3510 Low: 1.3435 Close: 1.3457
- 1.3371 is providing support
- 1.3457 is a weak resistance line
Further levels in both directions:
- Below: 1.3371, 1.3253 and 1.3120
- Above: 1.3457, 1.3551, 1.3648 and 1.3782
- Current range: 1.3371 to 1.3457
OANDA’s Open Positions Ratio
USD/CAD ratio is showing short positions with a strong majority (62%), indicative of trader bias towards USD/CAD continuing to move to lower ground.