Canadian Dollar Ticks Higher, Key Job Reports Loom
MarketPulse | Mar 09, 2018 08:17AM ET
USD/CAD is showing slight losses in the Friday session. In the North American session, USD/CAD is trading at 1.2878, down 0.15% on the day. On Friday, employment data will be in focus on both sides of the border. Canada releases employment change, and the US publishes wage growth and nonfarm payrolls.
Is President Trump baiting his trading partners into an all-out global trade war? After declaring that trade wars are a “good thing”, Trump made good on his tariff threat on Thursday, and signed an order imposing 25% tariffs on steel imports. Canada is the largest exporter of steel to the US, accounting for some 16% of US steel imports. The move could have severely impacted on the Canadian steel industry, but Trump has exempted Canada and Mexico from the tariffs, at least temporarily, drawing a huge sigh of relief from Ottawa. Still fears of an all-out global trade war remain a serious concern for Canada and the resignation of Gary Cohn, a senior economist in the White House who opposed the tariffs, will only dampen investor risk appetite.
The Federal Reserve is widely expected to raise rate four times in 2018, but the Bank of Canada will likely be unable to compete with that kind of pace. The BoC is concerned with economic growth, which slowed in the fourth quarter, as well as uncertainty over NAFTA, which could fall apart if the Trump administration makes good on its threat to withdraw if its demands for more favorable treatment for US goods is not met. The Bank is not expected to raise rates before May, and if the Fed outpaces the BoC on the rate front, the Canadian dollar could lose ground to a more attractive US currency.
USD/CAD Fundamentals
Thursday (March 8)
- 7:30 US Challenger Job Cuts. Actual -4.3%
- 8:15 Canadian Housing Starts. Estimate 217K. Actual 230K
- 8:30 Canadian Building Permits. Estimate -0.3%. Actual 5.6%
- 8:30 Canadian NHPI. Estimate 0.1%. Actual 0.0%
- 8:30 US Unemployment Claims. Estimate 220K
- 10:30 US Natural Gas Storage. Estimate -58B
- 11:00 BoC Governor Stephen Poloz Speaks
- 15:35 BoC Deputy Governor Timothy Lane Speaks
Friday (March 9)
- 8:30 Canadian Employment Change. Estimate 21.8K
- 8:30 Canadian Unemployment Rate. Estimate 5.9%
- 8:30 US Average Hourly Earnings. Estimate 0.2%
- 8:30 US Nonfarm Employment Change. Estimate 201K
- 8:30 US Unemployment Rate. Estimate 4.0%
*All release times are GMT
*Key events are in bold
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USD/CAD for Friday, March 9, 2018
USD/CAD, March 9 at 8:00 EST
Open: 1.2897 High: 1.2909 Low: 1.2866 Close: 1.2878
USD/CAD Technicals
| S3 | S2 | S1 | R1 | R2 | R3 |
| 1.2630 | 1.2757 | 1.2865 | 1.2920 | 1.3014 | 1.3165 |
USD/CAD showed little movement in the Asian session and has edged lower in European trade
- 1.2865 is under pressure in support
- 1.2920 is the next resistance line
- Current range: 1.2865 to 1.2920
Further levels in both directions:
- Below: 1.2865, 1.2757 and 1.2630
- Above: 1.2920, 1.3014, 1.3165 and 1.3270
OANDA’s Open Positions Ratio
USD/CAD ratio continues to show little movement this week. Currently, short positions have a majority (59%), indicative of trader bias towards USD/CAD reversing directions and moving lower.
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