USDCAD news - page 35
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Canadian June housing starts 218.3K vs 189.0K expected
Canadian housing starts for June from the CMHC
"Overall, June saw housing starts pick up pace in Canada, bolstered by apartment construction in Ontario - especially new condo construction in Toronto's downtown core," said Bob Dugan, CMHC Chief Economist. "However, elsewhere in the country, construction activity slowed as apartment construction eased in Quebec. Housing starts are also trending down in Alberta as a result of high inventories in the new and existing home markets of that province."
Canada June Teranet house price index +10.0% y/y vs +9.0% y/y prior
The Canadian Teranet/National Bank house price index for June 2016
BoC Keeps Rates, Cuts 2016 GDP Outlook
The Bank of Canada (BoC) kep its key interest rate unchanged again on Wednesday, signaling a cautious approach due to weak domestic data and increased global uncertainty in the post-Brexit-vote environment.
Furthermore, the BoC reduced its GDP expectations for 2016 to 1.3% from 1.7%, while it sees 2017 GDP only 2.2% compared to the previous estimate of 2.3%.
The Ottawa-based central bank left its benchmark lending rate at 0.5% in a decision that was widely expected.
In fact, most economists expect the central bank to stand pat until late 2017 or 2018, before it considers increasing the key rate.
Canada new house price index +2.7% y/y vs +2.2% exp
New house prices rise 2.7%
New houses hadn't been an inflationary problem in Canada but that's beginning to change.
USD/CAD forecast for the week of July 18, 2016
The USD/CAD pair went back and forth during the course of the week, testing the fairly tight consolidation area that we have been in. The 1.30 level seems to be a bit of a magnet for price, but ultimately I think of that this is a market that will have to be traded off of shorter-term charts, and quite frankly doesn’t appeal to me from a longer-term perspective at this point in time. With this, I will look to small trades at best with short time frames in order to get involved in the USD/CAD pair.
Canada May int'l securities transaction $14.73B vs $15.52B prior
Canadian financial flows information
Foreigners bought $14.73 of Canadian securities in May. About 95% of the net buying was in bonds while foreigners divested about $3.38B of money market paper.
As for outflows, Canadians bought $5.05B of foreign securities in the month.
These numbers are (at best) a minor curiousity and never a market mover.
Loonie Recovers Losses After Hitting 1-Wk Low
The USD/CAD pair edged up 0.15% and traded at C$1.3043, after reaching an intraday high of C$1.3095.
The resource-linked loonie somewhat recovered after oil prices returned to trading in the green on Wednesday.
Oil was largely flat, but traded on the upside, with WTI futures rising 0.88% to $45.85 per barrel and Brent contracts jumping 0.94% to $47.40 per barrel.
Commodity traders analyzed the Energy Information Administration's weekly print, which showed that commercial crude stockpiles trashed 2.342 million barrels in the period ending July 15, following the 2.546 million barrel fall seen in the previous seven days.
Markets were expecting to see a decrease of 1.295 million barrels last week.
"The dominance of the broader tone is underscored by CAD's tight correlation to oil and its ongoing disconnect to yield spreads," said Eric Theoret, currency strategist at Scotiabank.
"The near-term balance of CAD risk appears to be increasingly biased to weakness as we note the material deterioration in the relative (US-Canada) growth outlook and potential for a renewed turn in sentiment toward greater demand for protection against downside risk,"
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Canadian June CPI 1.5% y/y vs 1.4% y/y expected
Canadian inflation numbers for June
With retail sales and inflation both a touch better than expected, that was enough to spark a 50 pip drop in USD/CAD. That seems like an overshoot in a market with no other data to focus on at the moment.
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USD/CAD forecast for the week of July 25, 2016
The USD/CAD pair broke higher during the course of the week, touching the top of the recent resistance. If we can break above the 1.32 level, the market could very well reach towards the 1.35 level. Keep in mind that the Canadian dollar is highly influenced by oil markets, and they of course look very likely to start falling and as a result it looks as if we should continue to go higher given enough time, and for that matter I believe that we will break above the 1.35 handle. Once that happens, we should reach towards the highs again.
USD/CAD Technical Analysis: Strong Support at $1.3150, Buy on Dips
The major trendline support for USD/CAD currency pair stands at $1.3150 with the pair rebounding from that level to around $1.3200.
On the lower side the trendline support is at $1.3150 with breaks below seen dragging the pair to 200-hours moving average of $1.3065.
The minor resistance for USD/CAD is at $1.32119 representing 61.8% Fibonacii retracement of move from $1.32440 to $1.31598 with break above seen taking the pair to the temporary top made at $1.32440-$1.3295.
The pair should close above 200-days moving average of $1.3306 for an overall trend reversal.
Trade Idea: Buy on dips at $1.3190 with stop loss at $1.3150 targeting $1.3295.
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