USD/CAD – Canadian Dollar Improves to 3-Week Highs on OPEC Deal Optimism, Canadian GDP Next

The Canadian dollar has posted gains on Wednesday, erasing the losses which marked the Tuesday session. Currently, the pair is trading at 1.3360. In economic news, OPEC members are meeting in Vienna, and there is renewed optimism that an agreement will be reached to cut production levels. Canada will release GDP, with the estimate standing at a weak 0.1%. The US will publish ADP Nonfarm Employment Change, with the indicator expected to improve to 161 thousand. On Thursday, the US releases unemployment claims and the ISM Manufacturing PMI.

OPEC members are meeting today in Vienna, hoping to reach an agreement to cap production in order to boost oil prices. OPEC wants to include non-OPEC countries as well, and Russia has come out in favor of a freeze. One of the major sticking points has been Iran’s insistence to maintain output at pre-sanction levels. Word is out that Saudi Arabia has swallowed hard and accepted Iran’s demand, so the markets are optimistic that a deal will be reached later in the day. The Canadian dollar has responded with gains and is currently trading at 3-week highs. US crude has surged 6.6 percent in the Wednesday session and is trading above the $48 level.

US indicators impressed on Tuesday. Preliminary GDP sparkled in the third quarter, as the economy expanded 3.2%, above the forecast of 3.0%. The 3.2% gain was an upwards revision of Advance GDP, which came in at 2.9%. Solid consumer confidence numbers have been a critical factor in the US recovery, as an optimistic consumer is likely to go out and spend money. CB Consumer Confidence jumped to 107.1 points in November, surpassing the 100-level for the third time in four months. Last week, UoM Consumer Sentiment jumped to 93.8 points, its highest level since May. Donald Trump’s surprise election victory has not had an adverse effect on consumer confidence, and if these rosy numbers translate into stronger consumer spending, the US dollar could continue to climb against its rivals.

US Q3 GDP Revised Upward on Consumer Spending

OPEC to Save Face with a Disappointing Deal

USD/CAD Fundamentals

Wednesday (November 30)

• All Day – OPEC Meetings
• 8:15 US ADP Nonfarm Employment Change. Estimate 161K
• 8:30 Canadian GDP. Estimate 0.1%
• 8:30 Canadian RMPI. Estimate 3.2%
• 8:30 Canadian IPPI. Estimate 0.7%
• 8:30 US Core PCE Price Index. Estimate 0.1%
• 8:30 US Personal Spending. Estimate 0.5%
• 8:30 US Personal Income. Estimate 0.4%
• 9:45 US Chicago PMI. Estimate 52.1
• 10:00 US Pending Home Sales. Estimate 0.3%
• 10:30 US Crude Oil Inventories. Estimate 0.7M
• 11:45 US FOMC Member Jerome Powell Speech
• 14:00 US Beige Book

Upcoming Key Events

Thursday (December 1)

• 8:30 US Unemployment Claims. Estimate 252K
• 10:00 US ISM Manufacturing PMI. Estimate 52.1

*All release times are EST

*Key events are in bold

USD/CAD for Wednesday, November 30, 2016

USD/CAD November 30 at 8:00 EST

Open: 1.3431 High: 1.3451 Low: 1.3354 Close: 1.3373

USD/CAD Technical

• USD/CAD was flat in the Asian session and has posted losses in European trade
• 1.3371 is under pressure in support
• There is resistance at 1.3457

Further levels in both directions:

• Below: 1.3371, 1.3253 and 1.3120
• Above: 1.3457, 1.3551, 1.3648 and 1.3782
• Current range: 1.3371 to 1.3457

OANDA’s Open Positions Ratio

USD/CAD ratio remains unchanged this week. Currently, short positions command a strong majority (57%), indicative of trader bias towards USD/CAD continuing to move to lower ground.

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