USD/CAD Loonie Higher As US Inflation Fail to Spur USD Gains
Canadian Currency Losing Oil Support Ahead of Fed Minutes
The CAD recovered after yesterday losses after lower than expected Canadian manufacturing sales were published. After the drop in the price of oil the Canadian economy is looking for other sectors to kickstart growth. The Bank of Canada has pushed forward the idea that a weak currency would boost the manufacturing industry, but after a year and two interest rates cuts, factories are covering the gap. Services remain the best bet for growth in Canada as they are more flexible and attracted investment with the drop in the Loonie. The USD/CAD is trading at 1.3320 caught in a tight range awaiting the release of the U.S. Federal Open Market Committee (FOMC) meeting minutes tomorrow at 2:00 pm EST.
U.S. inflation came inline with forecasts at 0.2 percent for consumer price index (CPI) and the less volatile core CPI that excludes food and energy. While economic indicators are not painting the best side of the U.S. economy, so far the American non farm payrolls report , retail sales and inflation data has not derailed the expectation that the Fed will announce a benchmark interest rate rise when the Fed meets in December 15 and 16.
The Canadian dollar will be trading without any support from domestic economic indicators on Wednesday. The next item to be releases will be the Wholesale data on Thursday and the Bank of Canada report later the same day. The highlight of the week for the CAD will be on Friday when the retail sales and monthly inflation data are published.
The price of oil has dragged the CAD around. Crude prices continued the downward trajectory from last week, only to reverse course and end up with a gain after almost heading below the $40 price level. The uncertainty and tensions that arose after the Paris attacks and the G20 meeting in Turkey have complicated the pricing of energy. The attacks put a premium on crude as supply might be constrained, but on the other hand thanks to the OPEC the world is awash in plenty of crude with tankers full of oil sailing around the world which puts downward pressure on the price of a barrel.
CAD Events to watch this week:
Wednesday, November 18
2:00 pm USD FOMC Meeting Minutes
Tentative JPY Monetary Policy Statement
Thursday, November 19
8:30am CAD Wholesale Sales m/m
Friday, November 20
8:30am CAD Core CPI m/m
8:30am CAD Core Retail Sales m/m
8:30am CAD CPI m/m
8:30am CAD Retail Sales m/m
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities.
Opinions are the authors — not necessarily OANDA’s, its officers or directors. OANDA’s Terms of Use and Privacy Policy apply. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Recommended Content
Editors’ Picks
EUR/USD hovers around 1.0700 after German IFO data
EUR/USD stays in a consolidation phase at around 1.0700 in the European session on Wednesday. Upbeat IFO sentiment data from Germany helps the Euro hold its ground as market focus shifts to US Durable Goods Orders data.
USD/JPY refreshes 34-year high, attacks 155.00 as intervention risks loom
USD/JPY is renewing a multi-decade high, closing in on 155.00. Traders turn cautious on heightened risks of Japan's FX intervention. Broad US Dollar rebound aids the upside in the major. US Durable Goods data are next on tap.
Gold price flat lines above $2,300 mark, looks to US macro data for fresh impetus
Gold price (XAU/USD) struggles to capitalize on the previous day's bounce from over a two-week low – levels just below the $2,300 mark – and oscillates in a narrow range heading into the European session on Wednesday.
Worldcoin looks set for comeback despite Nvidia’s 22% crash Premium
Worldcoin (WLD) price is in a better position than last week's and shows signs of a potential comeback. This development occurs amid the sharp decline in the valuation of the popular GPU manufacturer Nvidia.
Three fundamentals for the week: US GDP, BoJ and the Fed's favorite inflation gauge stand out Premium
While it is hard to predict when geopolitical news erupts, the level of tension is lower – allowing for key data to have its say. This week's US figures are set to shape the Federal Reserve's decision next week – and the Bank of Japan may struggle to halt the Yen's deterioration.