USD/CAD – Limited Movement as Canadian Housing Inflation Remains Listless

The Canadian dollar is steady on Thursday, as the pair trades in the mid-1.18 range in the North American session. On the release front, US Unemployment Claims dropped to 294 thousand, slightly above the estimate. This figure was within expectations, as the estimate stood at 291 thousand. On Friday, we’ll get a look at the all-important Nonfarm Payrolls as well as the unemployment rate. In Canada, the New Housing Price Index posted a weak gain of 0.1%, unchanged for a third straight month.

US employment data will be in the spotlight on Thursday and Friday. Earlier on Thursday, Unemployment Claims came in at 294 thousand, down from 298 a week earlier. This figure was within expectations, as the estimate stood at 291 thousand. On Friday, we’ll get a look at the all-important Nonfarm Payrolls as well as the unemployment rate.

The Federal Reserve released the minutes of its previous meeting on Wednesday, with no surprises to shake up the markets. There had been a lot of speculation that the insertion of the word “patience” in the December policy statement signaled a more aggressive monetary stance on the part of the Fed. However, the minutes stated that Fed members remained of the view that monetary policy had not changed, and that a rate hike would not occur before April. The markets are expecting a rate hike sometimes in 2015, but it’s hard to be any more precise. Although economic growth continues to improve, inflation remains at very low levels, which means that the economy is in no danger of overheating, so there is no immediate need for a rate increase.

Earlier in the week, Canada posted a trade deficit for the first time in 3 months, with a reading of $-0.6 billion. The estimate stood at $-0.2 billion. Ivey PMI posted a strong reading of 55.4 points, easily beating the forecast of 55.3 points. On the manufacturing front, the Raw Materials Price Index continued to point downwards. The index came in at – 5.8% in November, its fifth straight decline. The estimate stood at -4.6%. Softer demand for raw materials is due to weak consumer demand as well as the global slowdown, which has put a dent in the export sector.

USD/CAD for Thursday, January 8, 2015

USD/CAD January 8 at 16:00 GMT

USD/CAD 1.1815 H: 1.1839 L: 1.1797

USD/CAD Technical

• USD/CAD has been uneventful throughout the day. The pair posted a high of 1.1839 earlier in the North American session.
• 1.1723 remains a strong support level.
• 1.1875 is an immediate resistance line.
• Current range: 1.1723 to 1.1875

Further levels in both directions:

• Below: 1.1723, 1.1669, 1.1580, 1.1493 and 1.1414
• Above: 1.1875, 1.1975, 1.2096 and 1.2190

OANDA’s Open Positions Ratio

USD/CAD ratio is pointing to gains in long positions on Thursday, reversing the direction seen a day earlier. This is not consistent with the pair’s movement, as the pair is almost unchanged. The ratio has a majority of short positions, indicative of trader bias towards the Canadian dollar moving to higher ground.

USD/CAD Fundamentals

• 12:30 US Challenger Job Cuts. Actual 6.6%.
• 13:30 Canadian NHPI. Estimate 0.2%. Actual 0.1%.
• 13:30 US Unemployment Claims. Estimate 291K. Actual 294K.
• 15:30 US Natural Gas Storage. Estimate -120B. Actual -131B.
• 20:00 US Consumer Credit. Estimate 15.1B.

*Key releases are highlighted in bold

*All release times are GMT

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