USD/CAD – Canadian Dollar Lower, US Consumer Data Next

The Canadian dollar has edged lower in the Wednesday session. In the North American session, USD/CAD is trading at 1.2758, up 0.20% on the day. There are no Canadian indicators on the schedule. In the US, the focus is on consumer spending and inflation numbers. CPI is expected to come in at 0.1% and Core CPI at 0.2%. Consumer spending is also expected to post low numbers, with the estimate for Retail Sales at 0.2% and Core Retail Sales at 0.0%. On Thursday, Canada releases Manufacturing Sales and the US publishes unemployment claims and the Philly Fed Manufacturing Index.

US President Trump reiterated his message of “America first” on his recent tour of Pacific Asian countries. This protectionist stance could signal trouble for Canada and Mexico, as Trump has vowed to renegotiate the NAFTA free trade agreement, which covers over $1 trillion a year in trade. On his Asian trip, Trump reiterated that he favors bilateral trade agreements rather than multilateral arrangements. Negotiators from the three countries are meeting for another round of talks on Wednesday, and by all accounts, the talks are progressing slowly. If NAFTA is not renegotiated, the Canadian economy will be negatively affected, and the Canadian dollar would likely lose ground against the greenback.

US Producer Price Index reports were stronger than expected in October. Core PPI and PPI remained unchanged at 0.4%, beating their estimates. PPI increased at an annualized rate of 2.8%, its fastest gain since February 2012. Will CPI numbers also beat the estimate? Inflation levels are being closely monitored by the Federal Reserve, as stronger inflation levels would likely result in a rate hike in early 2018. The markets are very bullish on higher rates, with a December hike priced in at 91% and a January raise priced in at 89%.

USD/CAD Fundamentals 

Wednesday (November 15)

• 3:00 US FOMC Member Charles Evans Speaks
• 8:30 US CPI. Estimate 0.1%
• 8:30 US Core CPI. Estimate 0.2%
• 8:30 US Retail Sales. Estimate 0.2%
• 8:30 US Core Retail Sales. Estimate 0.0%
• 8:30 US Empire State Manufacturing Index. Estimate 25.5
• 10:00 US Business Inventories. Estimate 0.0%
• 10:30 US Crude Oil Inventories. Estimate -2.1M
• 16:00 US TIC Long-Term Purchases. Estimate 34.6B
• 18:45 BoC Senior Deputy Governor Carolyn Wilkins Speaks

Thursday (November 16)

• 8:30 Canadian Foreign Securities Purchases. Estimate 10.68B
• 8:30 Canadian Manufacturing Sales. Estimate -0.4%
• 8:30 US Unemployment Claims. Estimate 235K
• 8:30 US Philly Fed Manufacturing Index. Estimate 24.5

*All release times are GMT

*Key events are in bold

USD/CAD for Wednesday, November 15, 2017

USD/CAD, November 15 at 7:40 EDT

Open: 1.2731 High: 1.2760 Low: 1.2713 Close: 1.2758

USD/CAD Technical

USD/CAD was flat in the Asian session and has edged lower in European trade

• 1.2701 is providing support
• 1.2778 is the next line of resistance
• Current range: 1.2701 to 1.2778

Further levels in both directions:

• Below: 1.2701, 1.2598, 1.2441 and 1.2357
• Above: 1.2778, 1.2943 and 1.3032

OANDA’s Open Positions Ratio

USD/CAD ratio is unchanged this week. Currently, long positions have a majority (57%), indicative of trader bias towards USD/CAD continuing to move higher.

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