USDCAD news - page 46
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Canadian Q3 corporate profits +14.0% q/q vs -3.4% prior
Quarterly profit numbers from Statistics Canada
USD/CAD forecast for the week of November 28, 2016
The USD/CAD pair fell initially during this past week, but turned around to form a nice-looking hammer. This is a market that should continue to fight buyers though, because the oil markets are starting a rollover. I believe that the US dollar will continue to strengthen a as the Canadian dollar because of its global strength anyway, so this is yet another reason to go along. Pullbacks continue to offer value, as we serve to reach towards the 1.40 level above. I have no interest in selling, as the 1.32 level is essentially the “floor” in this market right now.
USD/CAD Weekly Forecast November 28-December 2
A recovery in oil prices has negated the rally in the Dollar to leave USD/CAD trading withing a narrow range for the second consecutive week. The pair gained marginally in the past week and has threatened a breakout from a bear flag pattern in the second half of the week. Oil prices tumbled on Friday as ongoing OPEC talks continue to drive volatility to the commodity.
The bulk of the volatility seen in the pair occurred on Monday as a gap open followed by a sharp rise in WTI crude oil prices resulted in a sharp drop in the exchange rate. A marginal low on Tuesday served to print the low for the week and a recovery shows the pair trading near resistance from the upper line of a flag pattern to close out the week.
WTI crude oil (USOIL) started the week out strong but resistance at $48.82 reflecting the highest monthly close this year triggered a pause in the rally. A consolidation formed below the resistance level with the Thanksgiving holiday on Thursday contributing to low volatility in the financial markets. Reports on Friday that Saudi Arabia pulled out of a scheduled meeting on Monday with non-OPEC members including Russia triggered a sharp sell-off in USOIL with losses exceeding 3%.
The focus in the upcoming week will be on the OPEC meeting scheduled on Wednesday in Vienna. Oil prices will be subject to volatile fluctuations as there had been some expectations that a deal would be finalized at the meeting when initial talks to curb production were held on October 24. A correlated move is expected in USD/CAD on Wednesday.
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BOC's Poloz: Have seen some weakness lately but it was expected
Poloz is on Bloomberg TV
Q3 2016 Canadian current account balance -18.30bn vs -16.80bn exp
Q3 2016 Canadian current account balance report 29 November 2016
USD/CAD Fails to Gain Despite Declining Oil Prices
Oil prices dropped over 3% today but USD/CAD failed to gain as the correlation between the two products has been weakening since the middle of the month. While oil prices have been volatile on the back of OPEC oil output talks, volatility has subsided in the currency pair.
The exchange rate was previously trading in a tight range as the Dollar has been rallying since the US elections while oil prices had strengthened. This week, oil prices have corrected lower while the Dollar has also been in a correction lower.
While the correlation between oil prices and USD/CAD has not been strong as of late, volatility is expected to pick ahead of Wednesday’s OPEC meeting in Vienna. There have been some doubts that an output agreement will be made tomorrow, resulting in a decline in oil prices. A failure to reach an agreement would tend to put further pressure on oil prices and trigger a bullish leg higher in USD/CAD.
Also weighing on the exchange rate will be the weekly crude oil inventories released on Wednesday as well as GDP figures out of Canada scheduled for release at 0.8:30 EST and ADP non-farm payroll figures out of the US at 08:15 EST.
Positive US Data today failed to have a bullish impact on the Greenback. The second estimate of third-quarter GDP indicated a rise of 3.2% versus an expected rise of 3.0% and against a rise of 2.9% in the first estimate. The Conference Board reported consumer confidence to rise to 107.1 for November, reflecting the highest level since mid-2007. Analyst expectations were set at 101.3 and the prior month was revised up to 100.8.
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Canada Industrial Product prices for October rise +0.7% vs +0.6% est.
Raw materials price index 3.3% vs 3.5%
Canada net change in employment 10.7k vs. -15K est.
Unemployment rate at 6.8% vs 7.0% estimate
USD/CAD forecast for the week of December 5, 2016
The USD/CAD pair had a very negative week, pulling back from the 1.35 level. This is a market that’s been grinding higher for some time, and of course the recent rise in the oil markets have given strength to the Canadian dollar. We have also broken down below the bottom of the previous 2 hammers, so that’s a very sign as well. I believe that the 1.32 level will be supportive though, so with this being the case it’s very likely that we should find buyers sooner rather than later.
Canadian Economy Showing Signs of Stability, but Low Growth Conundrum Set to Persist
Optimism in Canada’s economic recovery rose this week following the release of better than expected GDP and employment data. But below the headlines were signs of deterioration that signal the continuation of Ottawa’s low-growth conundrum.
Gross domestic product accelerated 3.5% in the third quarter, the fastest quarterly expansion since 2014, Statistics Canada reported Wednesday. That followed a 1.3% contraction in April-June caused by devastating wildfires in the country’s oil-producing region.
The statistics agency reported on Friday that employers added 10,700 jobs last month, confounding analysts’ expectations for a loss of 20,000 jobs. While much stronger than expected, all of the gains came in part-time work. The prevalence of part-time work highlights the deteriorating quality of jobs in an economy once anchored by a booming resource sector.
Around 8,400 full-time positions were lost in October, while 19,400 part-time jobs were added. In fact, part-time work has been responsible for virtually all of the job gains in the past year and a half.
The Bank of Canada (BOC) has remained in policy purgatory since cutting interest rates twice in 2015, but came close to easing further in October, according to Governor Stephen Poloz. The Bank is expected to adopt a wait-and-see approach as the economy continues to sputter. Rising oil prices and fiscal stimulus south of the border could help the Canadian economy regain momentum next year, but the outlook remains tilted to the downside.