Thursday is looking like more of the same for the Canadian dollar, which has stayed close to the 1.10 line throughout the week. USD/CAD is trading close slightly above the 1.10 level in Thursday's North American session. In economic news, key US releases were a mix. Unemployment Claims came in well above the estimate, while Core Durable Goods Orders jumped to an eighteen-month high.
US releases painted a mixed picture on Thursday. Unemployment Claims jumped to 329 thousand, its highest level since mid-February. This was much higher than the estimate of 309 thousand. There was much better news from the manufacturing front, as Core Durable Goods Orders jumped 2.0% in March, crushing the estimate of 0.6%. This was the key indicator's best showing since September 2o12. Durable Goods Orders kept up the fast pace with a sharp gain of 2.6%, beating the estimate of 2.1%.
Canadian Core Retail Sales, one of the most important economic indicators, posted a 0.6% gain, down from 1.0% a month earlier. However, this did match the estimate. It was a similar story with Retail Sales, which dropped from 1.3% to 0.5% in March, matching the forecast. On Tuesday, Wholesale Sales jumped 1.1% in March, beating the estimate of 0.7%. It marked the best showing by the indicator since last November.
In the US, New Home Sales was a disaster, as the key indicator plunged to 384 thousand in March, down from 440 thousand in the previous release. The weak reading was nowhere near the estimate of 455 thousand, and marked an eight-month low for the key housing indicator. The housing sector is showing signs of weakness, as both New Home Sales and Existing Home Sales have been on a sustained downward trend.
The markets haven't reacted to events in Ukraine so far, but that could change if the violence in the east of the country worsens. Russian President Vladimir Putin has threatened to act on his "right" to invade Ukraine, and has also given the country an ultimatum regarding its gas debt. The gas supply from Russia to western Europe is in danger, and if the situation spills out of control, we could see a sharp response from the markets. US Vice-President Joe Biden is in Kiev for a symbolic visit. The West doesn't have many cards to play against Russia, so every move by Putin will be scrutinized and could impact on the markets.
USD/CAD 1.1029 H: 1.1039 L: 1.1016
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