USD/CAD – Canadian dollar at 2-week high, US consumer inflation misses estimate

The Canadian dollar is almost unchanged in the Thursday session. Currently, USD/CAD is trading at 1.2980, down 0.16% on the day. On the release front, Canadian New Housing Price Index posted a gain of 0.1% for a second straight month, matching the forecast. In the U.S, key consumer inflation reports missed their mark. CPI came in at 0.2%, shy of the estimate of 0.3%. Core CPI dipped lower to 0.1%, missing the forecast of 0.2%. Unemployment claims sparkled with a reading of 203 thousand, beating the forecast of 213 thousand. On Friday, the U.S release retail sales and UoM Consumer Sentiment.

The Canadian dollar has rallied this week, gaining 1.2%, On Thursday, the currency has dropped below the symbolic 1.30 level. Investors remain optimistic that the U.S and Canada will reach an agreement on a new NAFTA accord. The U.S and Mexico have already reached a deal, and Canada can ill afford to remain the odd man out. The Bank of Canada is also keeping a close eye on the NAFTA negotiations Last week’s rate announcement that policymakers would be “monitoring closely the course of the NAFTA negotiations and other trade policy developments, and their impact on the inflation outlook”. With the Canadian economy performing well and the Fed likely raising rates later this month, there is pressure on the BoC to again raise rates in 2018. However, concerns over NAFTA and global trade tensions have won the day for now, as the BoC took a pass on a rate hike.

CBRT takes the focus off BoE and ECB meetings

USD/CAD Fundamentals

Thursday (September 13)

• 8:30 Canadian NHPI. Estimate 0.1%
• 8:30 US CPI. Estimate 0.3%. Actual 0.2%
• 8:30 US Core CPI. Estimate 0.2%. Actual 0.1%
• 8:30 US Unemployment Claims. Estimate 210K. Actual 204K
• 10:00 US FOMC Member Rafael Bostic Speaks
• 10:30 US Natural Gas Storage. Estimate 65B
• 13:01 30-year Bond Auction
• 13:15 US FOMC Member Raphael Bostic Speaks
• 14:00 US Federal Budget Balance. Estimate -169.8B

Friday (September 14)

• 8:30 US Core Retail Sales. Estimate 0.5%
• 8:30 US Retail Sales. Estimate 0.4%
• 8:30 US Import Prices. Estimate -0.2%
• 9:15 US Capacity Utilization Rate. Estimate 78.3%
• 9:15 US Industrial Production. Estimate 0.3%
• 10:00 US Preliminary UoM Consumer Sentiment. Estimate 96.7
• 10:00 US Business Inventories. Estimate 0.5%
• 10:00 Preliminary UoM Inflation Expectations

*All release times are DST

*Key events are in bold

USD/CAD for Thursday, September 13, 2018

USD/CAD, September 13 at 8:55 DST

Open: 1.3000 High: 1.3019 Low: 1.2976 Close: 1.2980

USD/CAD Technical

USD/CAD showed little movement in the Asian session. In European trade, the pair posted small gains but has retracted. The pair has recorded slight losses in the North American session

• 1.2970 is under pressure in support. It could break during the North American session
• 1.3067 is the next resistance line
• Current range: 1.2970 to 1.3067

Further levels in both directions:

• Below: 1.2970, 1.2831 and 1.2666
• Above: 1.3067, 1.3160, 1.3292 and 1.3386

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