USDCAD news - page 26
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USD/CAD: Loonie Plunges, Employment Reports in Focus The USD/CAD pair found support in US rate hike bets, and neared the C$1.34 level on Thursday.
The so-called loonie was down 0.38%, trading at C$1.3392 against the greenback, marking the intraday low.
"Better growth and higher rates than many other large economies should continue to attract investors to the long side … With no data today (but a lot tomorrow) and attention on the ECB, Expect USDCAD to be something of a sideshow for the market today," Scotiabank said in its FX Daily note.
Traders paid close attention to Federal Reserve (Fed) Chair Janet Yellen's testimony about monetary policy before the Joint Economic Committee. Yellen reiterated that the US economy would continue to grow at a "moderate pace", eliminating residual slack from the labor market and pushing inflation back to the 2% inflation target.
Her testimony largely echoed the tone of her remarks delivered at an economic conference on Wednesday, which supported further rate hike bets ahead of the FOMC December meeting.
"Tightening is imminent, but don't worry, it will likely be gradual. Not surprisingly, that is the main message on policy from Fed Chair Yellen's prepared testimony. As expected, the testimony was effectively an abbreviated version of the speech given by Ms. Yellen yesterday," Jim O'Sullivan, chief US economist at High Frequency Economics said.
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USD/CAD Forecast Dec. 7-11 USD/CAD showed limited movement for a second straight week, closing at 1.3358. This week’s highlights are GDP and Employment Change. Here is an outlook on the major market-movers and an updated technical analysis for USD/CAD.
In the US, Janet Yellen provided strong hints that the Fed will raise rates next week, lauding the labor market and dismissing persistently weak inflation. The critical NFP came in above expectations, but the ISM PMIs disappointed. Canadian GDP missed expectations and employment numbers disappointed, but the Canadian dollar managed to hold its own against the greenback.
Updates:
* All times are GMT.
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USD/CAD: Loonie Hits 11.5-Year Low as Oil Prices Tumble and Fed Hike Bets Rise The USD/CAD pair gained ground on Monday, recording massive gains. The resource-linked loonie was weakened by a drop in oil prices, while the greenback found broad support on rate hike bets.
The loonie was down 1.08% and trading at C$1.3508 against the greenback, marking the lowest level since June 2004.
"USDCAD has traded to a fresh cycle (11-year) high this morning. We expect the trend higher to continue. Fundamental, technical and seasonal considerations are all aligning in USD-bullish fashion. We think USDCAD can reach 1.37 or a little more in the next 1-2 months and continue to look for levels nearer 1.40 over the longer run," Shaun Osborne, chief FX strategist at Scotiabank, and Eric Theoret, FX strategist at Scotiabank, said in a note.
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Canada Just Warned That Negative Interest Rates Are Coming Moments ago, the Bank of Canada's chief finally said what we had been patiently waiting for over the past several months: admission that Europe's experiment with negative rates is about to cross the Atlantic. From Market News:
That, as they say, is "forward guidance" of what is coming.
And what is coming, is also precisely what Keith Dicker from IceCap Asset Management said in his latest monthly letter, would happen in Canada in the very near future. To wit:
Canada
Now that the election is over, the new government can quickly get down to work to missing all of their economic forecasts and budgets.
IceCap is apolitical – we support neither the left, the center or the right. Instead, we see the world with our global goggles and can confirm that despite any and all economic policies from the new (or old) government – the Canadian economy will continue it’s downward trend.
This negative outlook for Canada isn’t driven by an insular view or perspective. Rather, the global trend is downward. The economic and monetary foundation for the global economy has shifted and this is the reason for our downward view for the Great White North.
During the election campaign, we shared this view with the eventual winning party. The response was a slow yawn and disapproving look which suggested either we didn’t know what we were talking about or they were not really interested in our answer to their question.
This lack of empathy for the escalating global government debt crisis is also shared by many in the financial sector as well. Yes, increasingly more and more investment managers are echoing concerns similar to ours – but make no mistake, the majority, and especially the really big investment and mutual fund companies continue to see a recovery right around the ole corner.
Of course, this mythical corner continues to be just as elusive as unicorns, trolls, elves and dragons. In 2014, Canada’s top Bay Street economists were all clamouring for the Bank of Canada to begin raising rates – after all, these economists had very big spreadsheets, with all kinds of neat formulas and corporate logos that predicted the Canadian economy was about to shoot to the moon.
Yes, the good times were back.
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New Home Prices Jump in Canada on Toronto Hikes Consumers looking for a new home in Canada faced steeper prices nationwide, as increases in Toronto kept stretching the price limits of the housing market.
The New Housing Price Index (NHPI) rose 0.3% in October after edging up 0.1% the previous month, Statistics Canada said on Thursday. The advance surprised the markets, as analysts' consensus projected an increase of just 0.1%.
On a yearly basis, NHPI was up 1.5%, after climbing 1.3% in August.
Toronto's advance
The capital of Ontario contributed the most to the increase in the national average, with prices jumping 0.5% in the Toronto and Oshawa combined region. Builders cited market conditions and higher land costs as the reasons for the climb, according to the data agency.
In addition, prices rose in Victoria – the first advance since April 2013. Also, new houses became more expensive in Hamilton and Edmonton. Moreover, Vancouver continued its upward trend, with prices rising for the fifth month in a row.
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USD/CAD: Loonie Falls Almost 3% as Oil Suffers Major Weekly Losses The USD/CAD pair posted a strong upward trend during the week, which ended with strong support for the US dollar based on expectations that the Federal Reserve (Fed) will announce a rate hike on December 16.
The so-called loonie ended the week at 1.3756 against the greenback, down 2.95%, having closed the previous week at C$1.3362.
The most significant currency mover during the week was crude oil, as the loonie remained very sensitive to the commodity’s price movements.
The oil sell-off reached new lows on Friday as crude prices dropped to seven-year lows, after the latest IEA forecast said that the oil market will remain oversupplied until late 2016.
"Crude prices continue to soften, helping drive the CAD to a marginal new lows again versus the USD overnight," Eric Theoret, currency strategist at Scotiabank, said in a note. "With OPEC ramping up production in the face of spot prices falling to a 6-year low, crude prices are poised to remain weak or weaken further … We remain bullish on USDCAD’s near-to-medium term direction."
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USD/CAD Forecast Dec. 14-18 USD/CAD posted its largest weekly gain since January, gaining about 370 points. The pair closed at 1.3754, its highest levels since June 2004. This week’s key events are Manufacturing Sales and Core CPI. Here is an outlook on the major market-movers and an updated technical analysis for USD/CAD.
In the US, retail sales and inflation numbers met expectations late in the week. Expectations of a rate hike at the all important Fed policy meeting enabled the US dollar to rack up huge gains against its Canadian counterpart.
Updates:
source
November 2015 Canadian TeranetNational Bank HPI +0.2% vs -0.2% exp m/m November 2015 Canadian Teranet National Bank House price index data
source
Canada Oct. wholesale trade sales -0.6% vs.0.1% est Canada wholesales trade sales for October 2015
USD/CAD forecast for the week of December 21, 2015 The USD/CAD pair broke higher during the course of the week, slamming into the 1.40 level. Because of this, we have fulfilled what would have been our first target from the longer-term perspective. A pullback from here is likely, but quite frankly we think that will only end up being a buying opportunity given enough time, as this market is most certainly in an uptrend. The uptrend is very strong, and because of that we are not surprised to see buyers enter at lower levels as it should be value in the US dollar.
There are a lot of different reasons the think of this uptrend continues, not the least of which is the velocity. However, that velocity cannot be kept up forever, so a pullback should just simply be more momentum building to try to break out to the upside given enough time. The Canadian dollar is struggling overall, and has been sold off drastically against most other currencies, so that tells us that the reason for the Canadian dollar fall so drastically is the oil markets. They are absolutely bearish at this point in time, so there’s no real relief coming for the Canadian dollars far as we can see.
Adding to the pressure in this market is the fact that the US dollar is the strongest currency in the world at the moment, and that the US economic numbers are continuing to impress most traders. Because of this, we don’t see the trend changing anytime soon and we believe that there is essentially going to be a “floor” in places where we have seen massive resistance previously, namely the 1.35 handle.
On the other hand, we could break above the 1.40 level right away, and that obviously would be very bullish sign. Truth be known though, we actually prefer pullbacks, as they represent value and give us a little bit more “wiggle room” in what is an otherwise “one-way trade.” It is not until we break down below the 1.30 level that we would consider selling, something that doesn’t look very likely anytime soon.
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