USD/CAD Climbs to 2017 High, Canadian Employment Change Next

USD/CAD has edged upwards in the Thursday session. In North American trade, the pair is trading at the 1.35 line. On the release front, Canadian NHPI remained unchanged at 0.1%, matching the forecast. In the US, unemployment claims climbed to 243 thousand, higher than the forecast of 239 thousand. In the US, today’s key event is unemployment claims, with the markets expecting the indicator to climb to 239 thousand. On Friday, employment numbers will be in the spotlight on both sides of the border. The US will release three key indicators – Nonfarm Payrolls, Average Hourly Earnings and the unemployment rate. Canada will publish Employment Change and the unemployment rate.

Canada’s employment market has improved in recent months, buoyed by strong employment gains. The economy added 48.3 thousand jobs and 53.7 thousand jobs in December and January respectively. This surprised the markets, which had predicted declines for each reading. The unemployment rate has also improved, dropping to 6.8%. A strong US economy has been good news for Canada, which is heavily dependent on its southern neighbor. At the same time, speculation of an imminent rate hike by the Fed has boosted the US dollar, which has jumped 2.5% against the Canadian currency since the end of February. USD/CAD has pushed above the 1.35 line, as the pair has hit a high for 2017.

After raising rates in December, the Fed appears ready to make a March move. The odds of a March hike continue to climb, and are currently at 88% percent, according to the CME Group. Fed policymakers have been dropping hints of a March move, and a red-hot labor market and higher inflation levels present further arguments in favor of higher rates. Earlier in the year, the Fed had said that it wanted to wait until it had a clearer idea of President Trump’s economic policy before it tightened monetary policy. However, Trump has not backed up his promises to reform the tax code and increase fiscal spending with any details. Some Fed policymakers wanted to raise rates earlier this year, so Fed Chair Yellen is under pressure to make a move, and it appears virtually certain that the Fed will raise rates by a quarter-point on March 15.

USD/CAD Fundamentals

Thursday (March 9)

• 7:30 US Challenger Job Cuts. Actual -40.0%
• 8:30 Canadian NHPI Estimate 0.1%. Actual 0.1%
• 8:30 Canadian Capacity Utilization Rate. Estimate 82.6%. Actual 82.2%.
• 8:30 US Unemployment Claims. Estimate 239K. Actual 243K
• 8:30 US Import Prices. Estimate 0.1%. Actual 0.2%
• 10:30 US Natural Gas Storage. Estimate -59B
• 13:01 US 30-y Bond Auction

Upcoming Key Events

Friday (March 10)

• 8:30 US Average Hourly Earnings. Estimate 0.3%
• 8:30 US Nonfarm Employment Change. Estimate 185K
• 8:30 US Unemployment Rate. Estimate 4.7%
• 8:30 Canadian Employment Change
• 8:30 Canadian Unemployment Rate

*All release times are GMT

*Key events are in bold

USD/CAD for Thursday, March 9, 2017

USD/CAD March 9 at 9:20 EST

Open: 1.3488 High: 1.3534 Low: 1.3481 Close: 1.3508

USD/CAD Technical

• USD/CAD was flat in the Asian session and posted gains in European trade. The pair is steady early in North American session.
• 1.3461 is providing support
• 1.3551 is the next resistance line

Further levels in both directions:

• Below: 1.3461, 1.3371, 1.3253 and 1.3120
• Above: 1.3551, 1.3672 and 1.3784
• Current range: 1.3461 to 1.3551

OANDA’s Open Positions Ratio

USD/CAD ratio is unchanged in the Thursday session. Currently, long positions have a strong majority (69%), indicative of trader bias towards USD/CAD continuing to move higher.

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 that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.