Dollar/CAD was moving on up in a busy week, hitting the highest levels since the summer. The upcoming week features two big events: the GDP release and the jobs report. Will the loonie continue suffering? Here are the highlights and an updated technical analysis for USD/CAD.
The Bank of Canada did not raise rates and also went quite dovish. They do not intend to raise rates anytime soon, and this sent the loonie lower.Canadian wholesale sales disappointed with a rise of only 0.5%. In the US, speculation about a hawkish Fed Chair stimulated the dollar, especially as Yellen is out. The US economy looks good.
Updates:
USD/CAD daily graph with support and resistance lines on it. Click to enlarge:
GDP: Tuesday, 12:30. The Canadian economy stalled back in July, falling short of expectations after an excellent first half of the year. Canada is unique in publishing its Gross Domestic Product once a month in contrast to once per quarter in most countries. A growth rate of 0.1% is on the cards.
RMPI: Tuesday, 12:30. The Raw Materials Price Index jumped by 1% in August, beating expectations and ending a three-month losing streak. Canada exports oil, a raw material, making this figure important.
Manufacturing PMI: Wednesday, 13:30. Canada’s manufacturing sector is growing nicely according to this measure by Markit. In September it advanced from 54.6 to 55 points.
Stephen Poloz talks: Tuesday, 19:30 and Wednesday, 20:15. The Governor of the Bank of Canada will testify twice in front of parliament and will likely comment on a wide range of topics. After his relatively dovish appearance at the press conference, Poloz could provide more details and perhaps more hints about the next moves of the BOC.
Jobs report: Friday, 12:30. Canada gained 10K jobs in September, slightly below expectations, but the unemployment rate dropped to 6.2%. All in all, the Canadian economy had an excellent first half, with more moderate growth later on. A gain of 13.6K is forecast now. The unemployment is expected to remain unchanged at 6.2%.
Trade balance: Friday, 12:30. Though it is overshadowed by the more important employment report, the trade numbers could have an impact. Canada’s trade deficit expanded to 3.4 billion in August, worse than expected. The country last enjoyed a surplus in January.
