USD/CAD: Almost Unchanged As U.S. Markets On Holiday
Kenny Fisher | Nov 29, 2013 12:24AM ET
We are seeing little movement on Thursday, as USD/CAD continues to trade close to the 1.06 line. In Canada, Current Account and the Raw Materials Price Index both missed their estimates. There are no US releases today, as the markets are closed for the Thanksgiving holiday.
While the US took time off to celebrate Thanksgiving Thursday, there was little holiday cheer north of the border, as Canadian releases were sluggish. Current Account, which is closely linked to currency demand, showed the deficit widening to -C$15.5 billion, up from -C$14.6 a month earlier. This reading was much worse than expected, as the estimate stood at -C$14.3 billion. Meanwhile, inflation indicators are going from bad to worse. RMPI, which boasted a gain of 4.2% back in July, posted a second straight decline in October. The index dropped 2.3%, missing the estimate of -2.1%, and posted a sixteen-month low. Industrial Product Price Index posted a decline of -0.3%, matching the forecast. The weak inflation numbers point to depressed economic activity. If Friday's GDP release continues in this vein, we could see the loonie head southward.
In the US, employment numbers continue to look sharp. For a second straight week, Unemployment Claims came in lower than market expectations. With increasing speculation about a QE taper, employment releases will remain under the market microscope. If employment numbers continue to improve, we can expect the Fed to scale down QE early in 2014, which would likely give a big boost to the US dollar.
USD/CAD November 28 at 14:45 GMT
USD/CAD 1.0589 H: 1.0598 L: 1.0571
- USD/CAD is steady on Thursday, with limited movement.
- On the upside, the pair is facing resistance at 1.0652. This line could face pressure if the US dollar continues to move upwards. This is followed by a resistance line at 1.0837, which has held firm since May 2010.
- The pair continues to receive support at 1.0573. This weak line could face pressure during the North American session. This line is followed by support at 1.0502, which is protecting the 1.05 line.
- Current range: 1.0573 to 1.0652
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Further levels in both directions:
- Below: 1.0573, 1.0502, 1.0442, 1.0337 and 1.0282
- Above 1.0652, 1.0837 and 1.0945 and 1.10
OANDA's Open Positions Ratio
USD/CAD ratio is almost unchanged in Thursday trading. This is reflected in the current movement of the pair, as the pair is showing very little movement. A majority of the open positions in the USD/CAD ratio are short, indicating a trader bias towards the Canadian dollar moving to higher ground.
The Canadian dollar remains under pressure, although we are seeing almost no movement on Thursday. We can expect the pair to continue to trade close to the 1.06 line during the North American session.
USD/CAD Fundamentals
- 13:30 Canadian Current Account. Estimate -14.3B. Actual -15.5B.
- 13:30 Canadian Raw Materials Price Index. Estimate -2.1%. Actual -2.3%.
- 13:30 Canadian Industrial Product Price Index. Estimate -0.3%. Actual -0.3%.
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