1. Technical Overview
As of writing the pair is up 0.59% at 1.2559 facing the next up barrier at 1.2592 (high Oct.17) followed by 1.2599 (high Oct.6) and finally 1.2664 (high Aug.31). On the other hand, a breach of 1.2460 (55-day sma) would aim for 1.2431 (low Oct.12) and then 1.2253 (low Sep.22).
USD/CAD PRICE SENTIMENT
USD/CAD BULLISH PERCENTAGE INDEX
USD/CAD Pivot points
USD/CAD BULLISH trading positions
2. Fundamental Overview
The pair met extra upside pressure after Canadian inflation figures showed headline consumer process rising at an annualized 1.6% and 0.2% on a monthly basis, missing estimates.
Further data saw core prices gauged by the BoC rising 0.8% over the last twelve months and 0.2% inter-month.
Still in Canada, headline retail sales missed forecasts today, contracting at a monthly 0.3% during August, while sales excluding the Autos sector dropped 0.7% MoM, both prints coming in below expectations.
In the meantime, the pair rose to fresh 3-day tops in the wake of the data, also bolstered by the generalized bid tone surrounding the buck.
USDCAD FUNDAMENTALS TODAY
3. Latest News & Analysis
ORGANIZATIONS, PEOPLE AND ECONOMIC DATA THAT INFLUENCE USD/CAD
In Canada, the organizations and people that affect the most the moves of the pair are:
- Bank of Canada (BoC, Canada’s Central bank) that issues statements and decides on the interest rates of the country. Its president is Stephen Poloz.
- Canadian Government (headed by Justin Trudeau) and its Department of Finance (whose minister is Bill Morneau) that implement policies that affect the economy of the country.
- CAPP (Canadian Association of Petroleum Producers): Canada being a prominent oil and natural gas producer, the trade organization of that industry is very important.
In the USA, we have:
- The US Government (and its President Donald Trump): events as administration statements, new laws and regulations or fiscal policy can increase or decrease the value of the US Dollar and the currencies traded against it, in this case the Canadian Dollar.
- Fed, the Federal Reserve of the United States whose president is Janet Yellen. The Fed controls the monetary policy, through active duties such as managing interest rates, setting the reserve requirement, and acting as a lender of last resort to the banking sector during times of bank insolvency or financial crisis.
In terms of economic data, we should highlight the Trade Account Balance, a balance between exports and imports of total goods and services. A positive value shows trade surplus, while a negative value shows trade deficit. It is an event that generates some volatility for the USD/CAD. If a steady demand in exchange for CAD exports is seen, that would turn into a positive growth in the trade balance, and that should be positive for the CAD.
Inflation is another economic value that is important for this pair. It is measured among others by the CPI (Core Price Index) and the PPI (Production Price Index). They are key indicators to measure inflation and changes in purchasing trends.
Stephen S. Poloz
Stephen S. Poloz was appointed Governor of the Bank of Canada, effective 3 June 2013, for a term of seven years. As Governor, he is also Chairman of the Board of Directors of the Bank and a member of the Board of Directors of the Bank for International Settlements (BIS). He currently chairs both the BIS Audit Committee and the Consultative Council for the Americas.
Janet L. Yellen (born August 13, 1946) took office as Chair of the Board of Governors of the Federal Reserve System (Fed) on February 3, 2014, for a four-year term ending February 3, 2018. She had already previously served as a Vice Chair from 2010 to 2014. This American economist also serves as Chairman of the Federal Open Market Committee (FOMC), the System's principal monetary policymaking body. Her declarations are also an important source of volatility, especially for the US Dollar and the currencies traded against it.
BOC NEWS & ANALYSIS
FED NEWS & ANALYSIS
HISTORIC HIGHS AND LOWS
- All-time records: Max: 1.6184 on 21/01/2001 - Min: 0.90059 on 05/11/2007
- Last 12 months (March 2016-March 2017): Max: 1.4689 on 18/01/2016 - Min: 1.24610 on 2/05/2016
- Last 5 years (March 2011-March 2016): Max: 1.4689 on 18/01/2016 - Min: 0.9635 on 10/09/2012
THE IMPORTANCE OF OIL FOR THE LOONIE
Canada is commonly known as a resource based economy being a large producer and supplier of oil. The leading export market for Canada is by far the United States making its currency particularly sensitive to US consumption data and economical health.
USDCAD 2017 YEARLY FORECAST
ASSETS THAT INFLUENCE USD/CAD THE MOST
- Commodities: as we already explained, oil is number one, but gold and natural gas are also to be taken into account by the traders.
- Currencies: JPY and EUR. Other important group of influent pairs includes: EUR/USD, GBP/USD, USD/JPY, AUD/USD, USD/CHF, an NZD/USD.
- Bonds: CSB (Canada Savings Bonds), CPB (Canada Premium Bond).
- Indices: S&P/TSX Capped Composite Index (the headline index for the Canadian equity market), S&P/TSX Global Gold Index (index of global gold securities) and S&P/TSX Capped Energy Index (benchmarks for related derivative products of Canadian economic sectors).