USD/CAD – Canadian Dollar Quiet Ahead of Fed, US Consumer Data

USD/CAD is almost unchanged in the Wednesday session. Currently, the pair is trading at 1.3450. On the release front, it’s a very busy day in the US. Retail sales and CPI indicators are expected to soften in February. Today’s highlight is the Federal Reserve policy meeting, with the central bank widely expected to raise the benchmark rate a quarter-point, from 0.50% to 0.75%. There are no Canadian events on the schedule. On Thursday, the US publishes a host of key indicators, led by unemployment claims.

With the markets expecting a quarter-point rate hike on Wednesday, will the currency markets react to a Fed move? Although a rate hike has been priced in by the markets at 93%, there have been disappointments in the past, so a rate move could boost the dollar at the expense of gold. Strong US employment numbers in February have reinforced market speculation that the Fed will raise rates for the first time this year. Nonfarm payrolls sparkled in February, as the indicator jumped to 235 thousand, easily beating the estimate of 196 thousand. Wage growth climbed 2.6% compared to February 2016, while the participation rate edged up to 63.0%, up from 62.9%. These solid job numbers have also provided President Trump with a much-needed boost. Trump is under pressure to present an economic agenda, but the markets won’t mind giving him some additional breathing room, with the economy performing so well.

Fed to Walk the Talk

USD/CAD Fundamentals

Wednesday, March 15

• 8:30 US CPI. Estimate 0.0%
• 8:30 US Core CPI. Estimate 0.2%
• 8:30 US Core Retail Sales. Estimate 0.1%
• 8:30 US Retail Sales. Estimate 0.2%
• 8:30 US Empire State Manufacturing Index. Estimate 15.3
• 10:00 US Business Inventories. Estimate 0.3%
• 10:00 US NAHB Housing Market Index. Estimate 65
• 10:30 US Crude Oil Inventories. Estimate 3.3M
• 14:00 US FOMC Economic Projections
• 14:00 US FOMC Statement
• 14:00 US Federal Funds Rate. Estimate <1.00%
• 14:00 US FOMC Press Conference
• 16:00 US TIC Long-Term Purchases. Estimate 13.4B

Upcoming Key Events

Thursday, March 16

• 8:30 US Building Permits. Estimate 1.26M
• 8:30 US Philly Fed Manufacturing Index. Estimate 30.2
• 8:30 US Unemployment Claims. Estimate 245K
• 10:00 US JOLTS Openings. Estimate 5.45M

*All release times are GMT

*Key events are in bold

USD/CAD for Wednesday, March 15, 2017

USD/CAD March 15 at 8:10 EST

Open: 1.3470 High: 1.3479 Low: 1.3448 Close: 1.3456

USD/CAD Technical

• USD/CAD has inched lower in the Asian and European sessions
• 1.3371 is providing support
• 1.3461 is fluid. Currently, it is a weak resistance line

Further levels in both directions:

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

OANDA’s Open Positions Ratio

USD/CAD ratio is showing movement towards short positions. Currently, long positions have a strong majority (66%), indicative of trader bias towards USD/CAD continuing to move higher.

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