USDCAD news - page 15
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USD/CAD edges lower despite strong U.S. data
The U.S. dollar edged lower against its Canadian counterpart on Thursday, pulling away from the previous session's two-and-a-half week peak despite the release of upbeat U.S. economic reports.
USD/CAD pulled away from 1.2400, the session high, to hit 1.2364 during early U.S. trade, down 0.17%.
The pair was likely to find support at 1.2273, Wednesday's low and resistance at 1.2443, the high of June 9.
The Commerce Department said that personal spending rose by 0.9% in May, above expectations for a gain of 0.7%. Personal spending rose 0.1% in April, whose figure was revised up from a previously reported flat reading.
The report also showed personal income rose by 0.5% in May, in line with forecasts and after rising 0.5% in April.
Separately, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending June 20 increased by 3,000 to 271,000 from the previous week’s total of 268,000. Analysts had expected initial jobless claims to rise by 4,000 to 272,000 last week.
The loonie was fractionally higher against the euro, with EUR/CAD slipping 0.16% to 1.3856.
Late night talks between Greek Prime Minister Alexis Tsipras, the European Commission, the European Central Bank and the International Monetary Fund ended without agreement on Wednesday.
Discussions were expected to resume in Brussels on Thursday morning, ahead of a Eurogroup meeting of euro zone finance ministers scheduled later in the day.
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USD/CAD: Loonie Falls After US Consumer Confidence Data
The USD/CAD pair moved closer to the C$1.24 level, with eyes on the US consumer confidence data as well as the EU’s Greece crisis.
The so-called loonie was down 0.42%, trading at C$1.2378 against the greenback, after hitting the intraday low of C$1.2395.
Traders were taking in the latest consumer confidence data released Friday morning in the US.
The University of Michigan confidence gauge revealed that consumers' attitudes rebounded in June, signaling that the economy is likely gathering momentum. The final reading rose to 96.1 points compared to the expected 94.6 points.
During the last session, markets absorbed the core price index for Personal Consumption Expenditures (PCE), which rose 0.1% in May, matching market expectations. Meanwhile, the annual change in the indicator, which excludes the volatile food and energy costs, came in at 1.2% after April's upward revision to 1.3%, according to the Department of Commerce.
The somewhat positive figures failed to offer meaningful support to the greenback on Thursday, with little volatility recorded after the release.
Traders also monitored Bank of Canada (BoC) Deputy Governor Lawrence Schembri’s speech before the Windsor-Essex Regional Chamber of Commerce yesterday. Schembri focused on much needed improvement of the US national bank regulations and proposed a bilateral agreement between the US and Canada on the resolution of banks with cross-border operations.
Greece concerns
Greece remains at the center of forex trading concerns, as the nation remains on the verge of exiting the euro zone and defaulting on its debt if a deal isn't reached by early next week. As a result, the upside potential for the riskier currencies is limited.
"CAD is soft, trading within a remarkably narrow range as we head into weekend risk centered on Greece," currency strategist at Scotiabank, Eric Theoret, said in a note.
A special Eurogroup meeting focused on bridging all differences between Greece and its lenders will be held on Saturday. German Chancellor Angela Merkel said earlier on Friday that the meeting will be decisive for the debt-ridden country.
"Broader sentiment will remain the primary driver for CAD as we consider the lack of domestic data, with potential headline risk arising from BoC Gov. Poloz’ weekend participation in a BIS panel in Basel. The panel is set to discuss ‘Monetary Policy and Household Demand’ and is closed to media," Theoret added.
Meanwhile, oil prices weighed on the commodity-based loonie during the session, as WTI futures fell 1.22% to $58.97 per barrel and Brent futures dropped 0.84% to $62.67 per barrel.
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USD/CAD forecast for the week of June 29, 2015
The USD/CAD pair initially tried to rally during the course of the week beginning back most of the gains in order to form a shooting star. This was preceded by a hammer, so quite frankly we don’t see much in the way of a trade here from the longer-term perspective. Yes, the market has been an uptrend for some time, but you can see that we have certainly stalled over the last several months. With that, we prefer to trade this market on the shorter-term charts as choppiness should continue.
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May 2015 Canadian PPI +0.5% vs +0.5% exp m/m
May 2015 Canadian PPI data report 29 June 2015
Energy taking centre stage for the rise in prices as they fell 0.2% when you strip it out. Raw material prices rose 1.1% ex-crude
USDCAD moves about 8 pips on the numbers and trades 1.2348
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Canadian April GDP -0.1% vs +0.1% m/m expected
Canadian April GDP:
USD/CAD was at 1.2366 ahead of the report and surged a half-cent to 1.2410 on the data.
The major drag was mining, which includes the oil industry. It was the sixth consecutive decline and included a 3.4% in the oil & gas subcomponent. StatsCan said it wasn't just low prices but maintenance shutdowns and production difficulties were also factors.
Manufacturing -- given the weak Canadian dollar -- is also a disappointment.
Forex - USD/CAD rises to fresh 3-month highs in early trade
The U.S. dollar rose to fresh three-month highs against its Canadian counterpart on Tuesday, as the greenback remained broadly supported by concerns over a potential Greek exit from the euro zone and as downbeat Canadian data dampened demand for the local currency.
USD/CAD hit 1.2758 during early U.S. trade, the pair's highest since March 31; the pair subsequently consolidated at 1.2752, advancing 0.79%.
The pair was likely to find support at 1.2562, Monday's low and resistance at 1.2706, the high of March 30.
Investors remained cautious as Greek Prime Minister Alexis Tsipras was to present new proposals to euro zone finance ministers later in the day, ahead of a meeting of European officials to discuss the aftermath of Sunday’s referendum in Greece.
Greek banks were set to remain closed on Tuesday after capital controls were extended until Wednesday, amid concerns that lenders are close to running out of cash. Banks have been shuttered since last Monday, with ATM withdrawals limited to €60 per day.
The European Central Bank announced Monday that it would keep its emergency liquidity assistance to Greece unchanged at levels announced last Monday.
The ECB also said it will adjust the haircuts on collateral accepted by the Bank of Greece as part of the ELA, adding to pressure on Athens.
In the U.S., the Bureau of Economic Analysis reported on Tuesday that the U.S. trade deficit rose to $41.87 billion in May from $40.7 billion in April, whose figure was revised from a previously reported deficit of $40.88 billion.
Analysts had expected the U.S. trade deficit to widen to $42.6 billion in May.
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May 2015 Canadian building permits -14.5% vs -5.0% exp
Building permit data from Canada 8 July 2015
A sharp fall in permits following two months of double digit gains
Canada June employment -6.4K vs -10.0K expected
Details of the June employment report from Statistics Canada:
It's all about the massive jump in full-time employment for the second consecutive month. The headline was a touch better than expectations but adding that many full-time jobs is boon to consumer spending and argues the economy remains solid despite a fall in commodity prices.
The Bank of Canada will be happy to sit on the sidelines and see how it plays out but for now, adding 95K full time jobs in two months will keep them happy.
The Canadian dollar rallied on the report, pushing USD/CAD down to 1.2657 from 1.2705. I expect to see further declines but oil will a key driver with Iran in focus.
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CAD Into Next Next Week's BoC: A Make Or Break Moment - SocGen
USD/CAD has been in bullish mode since the end of 2012, with the last acceleration taking place a year ago when oil prices collapsed but it now seems that the pair is at crossroads from both the technical and fundamental perspectives, notes SocGen
Mind the price action and watch 1.2750.
"The USD/CAD chart displays surprisingly clear long- and medium-term patterns. Intermediate levels within the bullish trend since 2012 have been determined by multi-year trend lines. It turns out that 1.2750/1.28 is now a major resistance zone: The pair is currently testing 1.2750, the downtrend line that started in 2002, and 1.28 has already been a doubletop this year. Despite the speed of the move, the stochastic indicator is no longer overbought, suggesting that the market has had a sufficiently long breather and that the next trend could be ready to start. A break of 1.2750 next week could open the door to massive appreciation," SocGen projects.
Don’t rule out a Bank of Canada cut.
"USD/CAD bullishness stemming from interest rates seemed more likely to come from US rates, but near-term prospects are limited on the USD side as rates now discount a smaller probably of a Fed hike this year. On the CAD side, however, the BoC meets next week (15 July). The BoC is not a very active central bank, and market consensus does not expect it to cut rates again after the preventive 25bp cut in January. However, a new cut cannot be entirely ruled out. A surprise BoC cut next week could trigger the break of a major resistance area for USD/CAD. This would propel the pair towards 1.30 and possibly beyond," SocGen argues.
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Loonie Near 4-Month Low as Traders Guess BoC’s Rate Position
The Canadian dollar fell further into C$1.27 territory versus its US peer, with the main focus set on the Bank of Canada (BoC) interest rate announcement and US macro data.
The so-called loonie was down 0.72% trading at C$1.2750 against the greenback, after hitting a four-month low of C$1.2784.
BoC’s rate
Markets have shifted focus to the upcoming BoC interest rate announcement scheduled for Wednesday, with economists estimating a very close call, leaning toward another 25 basis points rate cut. A cut will bring the rate down to 0.5%.
"The most important event this week is the Bank of Canada’s policy rate decision. Financial markets are evenly split between no change and a 25bp cut to 0.50%. With the economy arguably in recession and no rebound in sight, we think there is a very strong chance of a cut," economist with Capital Economics David Madani said in a note.
Eyes are also on the Canadian inflation data, which will be released on Friday, with economists projecting for the annual headline figure to tick up 1%.
American data
Moreover, on the US side there will be a slate of data to watch, especially after Fed Chair Yellen said on Friday that it will still be appropriate to increase rates in 2015. US releases include retail sales on Tuesday, Fed Chair Yellen's testimony along with the Fed's Beige Book on Wednesday, followed by inflation and housing data on Friday.
"The absence of US data scheduled for release through Monday’s session will leave the focus on the broader tone as market participants position for key events scheduled through the remainder of the week," currency strategist at Scotiabank, Eric Theoret, said in a note.
Greece's deal had a boosting affect on the greenback. Following 17 hours of negotiations, EU leaders in Brussels reached a unanimous agreement to keep Greece in the euro zone, but there are some harsh conditions involved.
The Greek government now has to legislate a number of key reform measures by Wednesday. After these reforms are passed, the procedures of the third bailout program might start toward the end of the week.
Meanwhile, oil prices edged down, failing to help out the commodity-based loonie. WTI futures ticked down 0.27% to $52.60 per barrel, while Brent futures fell 0.73% to $58.30 per barrel.
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