Forex - USD/CAD weekly outlook: October 24-28

Investing.com - The U.S. dollar ended the week lower against its Canadian counterpart on Friday, as sustained hopes of definitive measures to tackle the debt crisis in the euro zone dampened demand for the greenback.

USD/CAD hit 1.0043 on Monday, the pair's lowest since September 22; the pair subsequently consolidated at 1.0060 by close of trade on Friday, shedding 0.48% over the week.

The pair is likely to find support at 0.9908, the low of September 21 and resistance at 1.0236, the high of October 17.

The U.S. dollar came under pressure on Friday, as risk sentiment strengthened after German officials discussed different ways to involve the International Monetary Fund in a plan to enhance the powers of the euro zone's bailout fund, the European Financial Stability Facility.

European leaders gathered in Brussels over the weekend to discuss a series of measures designed to recapitalize banks, boost the EFSF and deal with Greece's financial woes.

EU leaders hoped to unveil a definitive solution to the region's debt crisis by the end of Sunday's talks or after an additional meeting scheduled on Wednesday.

The greenback was also hit after Federal Reserve Vice Chairman Janet Yellen said that a third round of large-scale securities purchases might be warranted to prop up the U.S. economy, boosting speculation over further easing.

On Thursday, government data showed that U.S. unemployment claims rose by 403,000 last week, exceeding expectations for a 401,000 increase, while a separate report showed that new home sales rose 4.91 million, below expectations for a 4.94 million increase.

Meanwhile, the loonie was boosted as crude oil gained for the third consecutive week.

On the New York Mercantile Exchange, light sweet crude futures for delivery in December traded at USD87.64 a barrel by close of trade on Friday, edging 0.25% higher over the week.

Raw materials, including oil account for about half of Canada’s export revenue.

Ahead of the coming week investors will be closely watching developments in the euro zone, amid hopes for a breakthrough on dealing with the deepening debt crisis in the region. Markets will also be eyeing Thursday’s U.S. data on third quarter economic growth in order to gauge the strength of the U.S. recovery. In addition, Canada is to announce its benchmark interest rate.

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

Monday, October 24

In the U.S., Federal Open Market Committee member William Dudley is due to speak.

Tuesday, October 25

The Bank of Canada is to announce its benchmark interest rate; the announcement will be followed by the bank’s rate statement, which contains important insights into current economic conditions. In addition, Canada is to publish official data on retail sales, the foremost indicator of consumer spending, which accounts for the majority of overall economic activity.

Later Tuesday, the U.S. is to publish industry data on house price inflation as well as a report on consumer confidence, which is a leading indicator of consumer spending.

Wednesday, October 26

The U.S. is to release government data on durable goods orders, a leading indicator of production. The country is also to publish official data on new home sales and crude oil stockpiles. This data can be a big market mover for the loonie due to the size of Canada's energy sector.

Also Wednesday, the BoC is to publish its monetary policy report. BoC Governor Mark Carney will hold a press conference to discuss the previous day’s interest rate decision.

Thursday, October 27

The U.S. is to publish preliminary data on third quarter gross domestic product, the broadest measure of economic activity and the primary gauge of the economy's health, as well as the GDP price index, the broadest measure of inflation.

The country is also to publish its weekly data on initial jobless claims and an industry report on pending home sales.

Friday, October 28

The U.S. is to round up the week with a flurry of data on personal income, personal spending, employment costs and consumer prices.

Meanwhile, the University of Michigan is to publish revised data on consumer sentiment and inflation expectations.