USDCAD news - page 44
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USD/CAD Continues To Trade Within Weekly Range
USD/CAD has ranged for most of the week as the pair is torn between a declining Dollar and falling oil prices. While the pair broke lower out of a rising channel seen on an hourly chart, the lack of downside momentum combined with the stronger uptrend seen as of late suggests that a bullish flag pattern may be playing out. Clear technical levels are defined for the pair, and a break stands to accompany follow through.
WTI crude oil prices (USOIL) are on track to post a fifth consecutive daily loss. A technical break late last week below a rising trendline from early August lows, as well as a horizontal level from August highs, has set a bearish technical tone. Fundamentally, a failure to make headway in an oil output freeze at the latest OPEC meeting has triggered the move lower. USOIL was last seen trading at $44.61 for a decline of 1.86%. The next notable horizontal support level is seen at $43.22 marking resistance in early August and support in September.
The US Dollar index (DXY) has posted a momentum driven decline in the past five sessions and is likely to close out a second consecutive week of losses. The index was met with buyers today at the European open but gains were not sustained with selling pressure in the North American session wiping out most of the early day gains. DXY was last seen at 97.13 for a loss of 0.26%.
Out of the United States today, weekly unemployment claims were reported to increase marginally to 265,000 against an expected 257,000. ISM non-manufacturing PMI printed at 54.8 against an expected 56.2. The final services PMI was reported at 54.8 in line with expectations and unchanged from the prior figure.
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Canada Oct employment +43.9K vs -15.0K expected
Another super-strong employment report from Canada. The full time jobs fell but the gain in part time and rising participation rate is a positive.
USD/CAD forecast for the week of November 7, 2016
The USD/CAD pair went back and forth over the past week, showing a real hasn’t tends to go above the 1.35 level ahead of the US election. That’s not a huge surprise, but at the same time it seems like the oil markets continue to show overall weakness that could play the Canadian dollar going forward. If we can break above the 1.35 handle, I believe then we go to the 1.40 level above. The 1.32 level below there should be supportive, so now I think it’s probably going to be easier to trade this market from a short-term perspective.
CAD: On Lower Flight Path Regardless Of The Outcome Of US Elections
The impact that the US election result would have on the C$ isn’t clear.
A Trump win may have investors further questioning the ability of non-energy exports to boost Canadian growth, likely seeing odds rise for another BoC rate cut. On the other hand, Canada’s increasingly rare status as a AAA sovereign means that the currency could benefit from flows into safe-haven assets. The currency has shown a negative correlation with Trump’s polling power recently, suggesting the former concern is winning. However, the currency moves have been small, certainly when compared with those of the Mexican Peso.
Regardless of who wins in the US next week, the underlying theme for the C$ will be the need to maintain a level weak enough to help close its current account deficit.
CIBC targets USD/CAD at 1.36 by the end of the year.
USD/CAD: Loonie Gains On Clinton Victory Hopes
Reports over the weekend that the FBI have absolved Clinton of any wrongdoing in her email practices has triggered a major shift in the financial markets as participants once again look to the potential of a Clinton victory.
An increase in risk appetite is seen in the markets with global equities and the US Dollar posting recoveries after sharp losses in the prior week. Precious metals are seen turning lower with Gold prices back below the $1300 handle once again.
The Canadian Dollar has gained on the prospects of a Clinton victory and is one of only two currencies that has posted a small gain against the Greenback today. USD/CAD gapped lower at the open but staged a recovery to close this week’s gap. The pair briefly fell through support at 1.3353 with an open at 1.3336 but has managed to regain the important level that has held the pair higher over the last few weeks.
Oil prices have been recovering on Monday to snap a six consecutive day losing streak. WTI crude oil (USOIL) posted a low on Friday and has been attempting to break higher. Resistance on an hourly chart is seen at $44.80 and a break would suggest that a broader recovery is taking place. On a daily chart, USOIL is on track to post a bullish engulfing candle.
The US Dollar has posted gains against most of its major counterparts today with the exception of the Loonie and Aussie. The trade-weighted index (DXY) gapped higher at the open and continued to rally without filling the gap. DXY was last seen at 97.77 for a gain of 0.91%
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September 2016 Canadian building permits -7.0% vs -5.6% exp m/m
September 2016 Canadian building permits 8 November 2016
Permits were down due to lower construction plans for retail complexes and office buildings.
USD/CAD Secures Net Gains, US Trade Policies In Focus
There will inevitably be very choppy trading in the short term and the any improvement in risk appetite would support the Canadian currency. Fears over a more aggressive US trade policy are likely to prevent significant losses for USD/CAD.
The Canadian dollar continued to gain support on Tuesday from expectations that Clinton would win the US Presidency. As markets anticipated her victory, there were steady losses for USD/CAD with a move to below the 1.3300 level and lows near 1.3270.
There was a very sharp reversal as the US election results came in and Trump performed much more strongly than expected and won key battleground states.
As it became clear that Trump would win, there were heavy Canadian dollar losses. There was a sharp deterioration in risk appetite during the Asian session, which also put downward pressure on the Canadian currency. Overall, USD/CAD moved to highs above the 1.3500 level.
Oil prices were also subjected to heavy selling with WTI sliding to lows near the $43.0 p/b level, adding to selling pressure on the Canadian currency.
There were further concerns surrounding medium-term trade policies with the risk that a Trump Administration would take a more aggressive stance, which could undermine the Canadian trade outlook, especially if the existing NAFTA arrangement is broken.
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September 2016 Canada new housing price index 0.2% vs 0.2% exp m/m
September 2016 Canadian new housing price index report 10 November 2016
Canadian Dollar Lows To Extend Against The Pound, US Dollar On Crude Oil Prices & NAFTA Concerns
The USD to CAD exchange rate saw great volatility this week, but where do leading foreign exchange studies and forecasts see the Loonie in the near-term?
The Canadian dollar (CAD) is facing a double whammy.
While crude oil prices are under pressure due to the uncertainty regarding an OPEC agreement in Algiers, the Donald Trump win puts the North American Free Trade Agreement in question.
The result is a weakening currency for Canada.
Crude oil prices trade lower on IEA report
While the crude oil prices had risen from their lows of $40 a barrel to $52 a barrel mark on hopes of an OPEC production freeze, OPEC data show otherwise.
OPEC has been pumping at record levels, reaching a record 33.83 million barrels a day last month.
The non-OPEC production, which was expected to decline has been resilient and IEA’s recent report suggests that the combined non-OPEC production is likely to rise by 500,000 barrels a day in 2017 as new projects come on line.
That shows an increased supply glut if OPEC doesn’t cut production, which will put pressure on oil prices next year.
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CAD: Loonie 'Trumped'; USD/CAD En-Route To 1.39
Donald Trump’s surprise election win in the early hours of Wednesday morning wasn’t met with the sort of reaction most, including us, were expecting in FX markets. Yes, the US$ sold off initially on the surprise. But that move lasted only a matter of hours.
By the time the win was conceded formally by Hilary Clinton, the C$ was down against the greenback. And not because of concern regarding trade or higher odds being placed on a BoC rate cut. Instead it was due to broad US$ appreciation, with the greenback not only up against risk-sentiment driven commodity currencies, but also the euro and safe havens such as the yen and Swiss franc.
With the US$ gaining extra unexpected traction, we are on our way to hitting our 1.39 Q1 target for USDCAD.
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