Forex - USD/CAD weekly outlook: May 9-13

Investing.com – Last week saw the Canadian dollar pull back from a three-year high against its U.S. counterpart, as crude oil, Canada’s largest export tumbled, as the greenback moved sharply higher against the euro.

USD/CAD hit 0.9712 on Thursday, the pair’s highest since April 18; the pair subsequently consolidated at 0.9662 by close of trade on Friday, tumbling 2.16% over the week.

The pair is likely to find support at 0.9566, Thursday’s low and resistance at 0.9720, the high of April 18.

On Thursday, oil prices dropped below USD100 a barrel on the New York Mercantile Exchange, for the first time since mid-March, pressured lower by an unexpected jump in weekly U.S. jobless claims and a broadly stronger dollar.

Oil prices remained under pressure on Friday, amid reports, subsequently denied, that Greece might leave the euro zone.

But the Canadian dollar pushed higher on Friday after Statistics Canada said that employers added 58,300 jobs in April after a decrease of 1,500 in the previous month. Analysts had expected payrolls to add 20,000 jobs last month. The jobless rate unexpectedly dropped to 7.6%.

A separate report showed that U.S. nonfarm payrolls rose by 244,000 in April, as the private sector posted the strongest employment gain in five years.

However, the U.S. unemployment rate rose to 9.0% last month from 8.8% in March. It was the first increase in the jobless rate since November, when it hit 9.8%. Economists had forecast that payrolls would rise by 185,000 and that the jobless rate would remain unchanged at 8.8%.

In the week ahead, investors will be looking towards U.S. data on retail sales and inflation to gauge the strength of the U.S. economic recovery while Canada is to publish data on its trade balance.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.

Monday, May 9

Canada is to publish government data on housing starts, a leading indicator of economic health.

Tuesday, May 10

The U.S. is to release official data on import prices, an important inflationary indicator as well as data on economic optimism and wholesale inventories.

Wednesday, May 11

The U.S. is to publish official data on its trade balance, the difference in value between imported and exported goods and services. In addition, the country is to publish government data on crude oil inventories, which can be a big market mover for the Canadian dollar.

Also Wednesday, Canada is to publish official data on its trade balance.

Thursday, May 12

The U.S. is to publish a weekly report on initial jobless claims as well as official data on producer price inflation, a leading indicator of consumer inflation. The country is also to publish government data on retail sales, the primary gauge of consumer spending, which accounts for the majority of overall economic activity.

Later in the day, Federal Reserve Chairman Ben Bernanke is to testify before the Senate Banking Committee in Washington.

Also Thursday, Canada is to produce data on new home prices, a leading indicator of the housing industry’s health.

Friday, May 13

The U.S. is to round up the week with official data on consumer price inflation while the University of Michigan is to publish preliminary data on consumer sentiment and inflation expectations.