USD/CAD: Canadian Dollar Steady Ahead Of Key Manufacturing Report

USD/CAD has ticked upwards in the Wednesday session. Currently, the pair is trading slightly below the 1.31 level. On the release front, Canadian Manufacturing Sales is expected to post a strong gain of 1.4 percent. In the US, it’s a busy day. We’ll get a look at release retail sales and CPI reports, and Janet Yellen will continue her testimony about the semiannual Monetary Policy Report before Congress. On Thursday, the US releases three key events – Building Permits, Philly Fed Manufacturing Index and unemployment claims.

All eyes are on Fed Chair Janet Yellen this week. The Fed chair testified before a Senate committee on Tuesday, and was surprisingly upfront about monetary policy, stating that she expected that the Fed would raise rates in the near future. Yellen stated that “waiting too long to remove accommodation would be unwise”, referring to the re-hot labor market and expectations that inflation would reach the Fed’s target of 2 percent. Will the Fed opt to raise rates in March or in June? The markets will be looking for clues on the timing of a move, as Yellen continues her testimony on Thursday before the House Financial Services Committee.

Canadian Prime Minister Justin Trudeau met with President Trump in Washington on Monday. It was “mission accomplished” for the Canadian leader, who was looking for reassurances from Trump that he would not tear up NAFTA, the trade agreement which is the bedrock of the trade relationship between the two countries. After the leaders met, Trump said his biggest concern with NAFTA was with Mexico rather than its northern neighbor.

Trump stated that the US has a “very outstanding trade relationship with Canada. We’ll be tweaking it.” Trudeau could do without the tweaking, but Trump’s comments nonetheless come as an enormous relief to the Canadian leader. Given that 80 percent of Canadian exports go to the US, any significant protectionist measures from the US could have drastic negative implications for the Canadian economy.

USD/CAD Fundamentals

Wednesday (February 15)

  • 13:30 Canadian Manufacturing Sales. Estimate 1.4%
  • 13:30 US CPI. Estimate 0.3%
  • 13:30 US Core CPI. Estimate 0.2%
  • 13:30 US Core Retail Sales. Estimate 0.4%
  • 13:30 US Retail Sales. Estimate 0.1%
  • 13:30 US Empire State Manufacturing Index. Estimate 7.2
  • 14:15 US Capacity Utilization Rate. Estimate 75.6%
  • 14:15 US Industrial Production. Estimate 0.1%
  • 15:00 US Fed Chair Janet Yellen Speech
  • 15:00 US Business Inventories. Estimate 0.5%
  • 15:00 US NAHB Housing Market Index. Estimate 68 points
  • 15:30 US Crude Oil Inventories. Estimate 3.7M
  • 17:45 US FOMC Member Patrick Harker Speaks
  • 21:00 US TIC Long-Term Purchases. Estimate 191.1B

Thursday (February 16)

  • 13:30 US Building Permits. Estimate 1.23M
  • 13:30 US Philly Fed Manufacturing Index. Estimate 18.5 points
  • 13:30 US Unemployment Claims. Estimate 243K

*All release times are GMT

*Key events are in bold

USD/CAD for Wednesday, February 15, 2017

USD/CAD Feb 14 – 16 Chart

USD/CAD February 15 at 8:30 EST

Open: 1.3081 High: 1.3096 Low: 1.3064 Close: 1.3090

USD/CAD Technical

  • USD/CAD has posted limited movement in the Asian and European sessions
  • 1.3003 is providing support
  • 1.3120 is a weak resistance line

Further levels in both directions:

  • Below: 1.3003, 1.2922 and 1.2815
  • Above: 1.3120, 1.3253, 1.3371 and 1.3461
  • Current range: 1.3003 to 1.3120

OANDA’s Open Positions Ratio

USD/CAD ratio is unchanged in the Wednesday session. Currently, long positions have a majority (60%), indicative of trader bias towards USD/CAD moving higher.

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