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September 2016 Canadian CPI 1.3% vs 1.5% exp y/y
Details of the September 2016 Canadian CPI data report 21 October 2016
USD/CAD forecast for the week of October 24, 2016
The USD/CAD pair initially fell during the course of the week, but found the 1.30 level below to be far too supportive, and we bounced enough to form a massive hammer. A break above the top the hammer would be a bullish sign, perhaps reaching towards the 1.35 level given enough momentum and patience. I believe that short-term pullbacks continue to offer buying opportunities as well, and with this I am bullish and will most certainly continue to be bullish when oil markets fall as they do look like they are ready to roll over.
The US Dollar To Canadian Dollar Rate Decline Is Predicted To Persist In 2016
Friday's spike seen in the USD to CAD exchange rate is likely to continue higher next week according to leading foreign exchange forecasts
The last week saw some hectic activity on the loonie and surprise comments by the Bank of Canada.
Though the central bank kept interest rates unchanged at 0.5%, Governor Stephen Poloz said that the bank’s governing council “actively” discussed cutting rates “in order to speed up the return of the economy to full capacity.”
“The fact that they considered a rate cut is significant,” said Mazen Issa, a senior foreign-exchange strategist at Toronto-Dominion Bank in New York. “It could be more bark than bite, but nonetheless, the signaling effect is important,” reports The Globe and Mail.
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Canada August wholesale trade sales +0.8% vs +0.6% expected
Wholesale sales data from Statistics Canada
USD/CAD Extends Gains As Oil Prices Correct Lower
USD/CAD pushed higher for a fourth consecutive session, scaling resistance at 1.3353 as oil prices dropped lower following Friday’s Recovery.
At the open this week, the exchange rate made a marginal high above the prior week’s highs but turned lower during the Asian, maintaining correlations with oil prices and the US Dollar. Support was found in early European trading, while upside momentum picked up in North American trading.
WTI crude oil (USOIL) traded in a range from the weekly open and pushed lower from range resistance at $50.93 in early European trading to reach a low of $49.61 shortly after the European close. A sharp reversal was seen following the close with a recovery above the $50.00 handle. USOIL was last seen at $50.60 for a loss of 0.66%.
Among the Loonie cross rates, AUD/CAD broke to 25-month highs today. The pair received a strong boost last week on a weaker Loonie following the BoC meeting and broke above resistance at 1.0169 referencing highs posted at the end of 2015.
Last week’s Bank of Canada meeting led to a sharp drop in the Loonie, causing the currency to lead the decliner’s list for the week. Governor Poloz had communicated how close the central bank was to easing policy at the meeting, an outcome that few had expected. Following his comments, The odds of a rate cut in December rose to 13% from a prior 2.5%. The current probability suggests further upside as the Governor’s message indicates good potential of monetary policy easing over the near-term.
USD/CAD Remains Supported By Lower Oil Prices
USD/CAD has shown resiliency today as the pair has managed to hold on to a small gain despite a volatile turn in the Dollar and comments from Poloz yesterday that cast some doubt on further easing in Canada. A further drop in oil prices has kept the pair supported as USD/CAD remains near highs.
Bank of Canada Governor Poloz testified before the House of Commons standing committee on finance on Monday, further clarifying comments from last Wednesday’s press conference. Poloz had communicated on Wednesday that the central bank had come close to easing policy at their meeting but cited a number of uncertainties as for the reason for not moving forward. In the testimony, Poloz indicated the implementation of new mortgage rules, the likely path of exports, government fiscal measure and the US election as the uncertainties the bank is currently facing. He communicated that the economic outlook was cut because of a lower trajectory for exports and because of recent macroprudential measures implemented to stabilize the housing market. He also discussed unconventional policies required to ease monetary policy further, suggesting the BoC may hold off for some time. There was a sharp drop in USD/CAD on his comments as the pair reached a low of 1.3278 from a pre-released level of 1.3385. The subsequent bounce brought the pair back towards resistance at 1.3353 and the pair has consolidated below the handle since.
The US Dollar index (DXY) broke above the weekly range at the North American open today, reaching a high of 99.12 prior to turning lower. The pair turned following disappointing consumer confidence figures. DXY was last seen at 98.72 for a loss of 0.03%.
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USD/CAD forecast for the week of October 31, 2016
The USD/CAD pair initially fell during the course of the week, but turned around to form a hammer. A break above the top of the hammer should send this market reaching towards the 1.35 handle above. With this, it’s likely that we should see resistance at that area, but given enough time I believe the buyers will return. I also believe that the 1.32 level should be a bit of a floor, so pullbacks should be buying opportunities. I have no interest in selling this market at this point in time, especially as the oil markets have been rolling over slightly.
USD/CAD Forecast - The US Dollar To Canadian Dollar Exchange Rate Is On Its Way Up
Last week's spike seen in the USD to CAD exchange rate is likely to continue higher next week according to leading foreign exchange studies and forecasts
Just 10 days back, on 19 October, the Bank of Canada Governor Stephen Poloz said that the central bank had “actively” discussed adding more stimulus into the economy and the loonie responded by weakening.
Fast forward to 24 October.
During a question – and – answer session with the lawmakers, Governor Poloz said that central bank’s ““best plan right now, we think, is to wait for the next 18 months or so,” reports BNN.
Naturally, the media, traders and economists interpreted it as – the central bank is unlikely to raise rates for the next 18 months and the loonie responded accordingly by strengthening 1% in just over an hour.
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Canada Sept industrial product price +0.4% vs +0.4% expected
Industrial product price and the raw materials price index for September
The industrial product price is Canada's version of the PPI. It's not generally a market-mover but there's a closer focus on the BOC at the moment after the surprise comment at the last press conference that policymakers had talked about cutting.
Canada August GDP +0.2% m/m vs +0.2% expected
August monthly GDP from Statistics Canada