Investing.com – Last week saw the Canadian dollar pull back from a seven-day high against its U.S. counterpart on Friday, as crude oil, Canada’s largest export, tumbled after reports Saudi Arabia planned to increase production, while mounting fears over global economic growth saw investors shun riskier assets.
USD/CAD hit 0.9710 on Friday, the pair’s lowest since June 1; the pair subsequently consolidated at 0.9796 by close of trade, easing up 0.17% over the week.
The pair is likely to find support at 0.9666, the low of June 1 and resistance at 0.9819, Wednesday’s high.
On Friday, Statistics Canada said that employers added 22,300 jobs in May after an increase of 58,300 in the previous month. Analysts had expected payrolls to add 21,800 jobs last month. The jobless rate unexpectedly dropped to 7.4%, the lowest level since January 2009.
But the Canadian dollar turned lower, as crude oil for July delivery tumbled 2.94% on the New York Mercantile Exchange, to close trading at USD98.85 a barrel after Saudi Arabia reportedly planned to increase production.
Canada's economy relies heavily on oil exports and its currency is affected by swings in their prices.
Meanwhile, the loonie was also pressured as risk aversion sharpened after data showed that China reported a trade surplus of USD13.1 billion in May, significantly below expectations for a surplus of USD19.1 billion, as export growth slowed.
The loonie posted its sixth consecutive weekly decline against the greenback, matching the longest losing streak since December 2007, amid growing concerns over the pace of the U.S. economic recovery, its largest trading partner.
Looking ahead to the coming week, U.S. data on retail sales and consumer price inflation will be a focus of attention. Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, June 13In the U.S., Federal Reserve Bank of Dallas President Richard Fisher is to speak at a public engagement.
Tuesday, June 14The U.S. is to produce official data on producer price inflation, a leading indicator of consumer inflation. The country is also due to publish government data on retail sales, the primary gauge of consumer spending, which accounts for the majority of overall economic activity.
Meanwhile, Canada is to publish a government report on the capacity utilization rate, an important indicator of consumer inflation, as well as data on new vehicle sales.
Later in the day, Bank of Canada Governor Mark Carney is due to speak at the Board of Trade, in Vancouver. Traders scrutinize his public engagements as they are often used to drop subtle clues regarding future monetary policy.
Wednesday, June 15
The U.S. is to release a flurry of data, including reports on consumer price inflation, industrial production and the capacity utilization rate, leading indicators of economic health. The country is also to publish government data on the balance of domestic and foreign investment as well a report on manufacturing activity in New York state.
In addition, the U.S. is to produce data on crude oil inventories, which can be a big market mover for the Canadian dollar.
Elsewhere, Canada is to produce official data on manufacturing sales, a leading indicator of economic health.
Thursday, June 16The U.S. is to publish its weekly report on initial jobless claims as well as official data on building permits and housing starts, an excellent gauge of future construction activity. The country is also to produce data on its current account and natural gas stockpiles, while the Federal Reserve Bank of Philadelphia is to publish an index of manufacturing activity.
Elsewhere, Canada is to publish official data on foreign security purchases, which is directly linked to currency demand.
Friday, June 17The U.S. is to round up the week with a report on an index of leading indicators, which is designed to predict the direction of the economy, while the University of Michigan is to publish preliminary data on consumer sentiment and inflation expectations.
Meanwhile, Canada is to publish data on wholesale sales, a leading indicator of consumer spending.
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