USD/CAD pushes above 1.33 as Canadian dollar dips, U.S GDP meets expectations

The Canadian dollar continues to lose ground this week. In Wednesday’s North American session, USD/CAD is trading at 1.3330, up 0.26% on the day. In economic news, there are no Canadian events for a third straight day. In the U.S, Preliminary GDP for the third quarter posted a gain of 3.5%, just shy of the estimate of 3.6%. This follows an identical gain of 3.5% in the Advanced GDP release. Thursday promises to be a busy day. Canada releases current account and there are three key events in the U.S. – Core PCE Price Index, personal spending and unemployment claims. As well, the FOMC releases the minutes of its November policy meeting.

The Canadian dollar continues to struggle. The currency is lower for a fourth straight day and USD/CAD has pushed above the 1.33 level for the first time since June. The ongoing U.S-China trade spat has hurt Canadian exports, and lower oil prices are also weighing on the economy. After a lack of Canadian events this week, Canada releases its monthly GDP report on Friday, and a solid reading could reverse the Canadian dollar’s fortunes.

The markets are keeping a close eye on the G-20 summit in Argentina, which begins on Friday. President Trump will meet with Chinese President Xi Jinping on the sidelines, and the stakes are high, given the full-blown trade war between the world’s two largest economies. Will we see a thaw in the tariff spat, or will Trump and Xi take shots at each other’s policies? Trump has threatened to raise tariffs on Chinese products from 10 percent to 25 percent, but this could be grandstanding ahead of the summit. Trump has a knack of reaching agreements with his adversaries despite hostile rhetoric, so it’s entirely possible that the parties will agree to keep negotiating, which could lift the mood of investors and boost the wobbly Canadian dollar.

Dollar holds gains as G-20 doldrums set in

Dinner for two, please

What to expect from Fed Chief Powell’s

USD/CAD Fundamentals

Wednesday (November 28)

• 8:30 US Preliminary GDP. Estimate 3.6%. Actual 3.5%
• 8:30 US Goods Trade Balance. Estimate -76.7B. Actual -77.2B
• 8:30 US Preliminary GDP Price Index. Estimate 1.7%. Actual 1.7%
• 8:30 US Preliminary Wholesale Inventories. Estimate 0.5%. Actual 0.7%
• 10:00 US New Home Sales. Estimate 583K
• 10:00 US Richmond Manufacturing Index. Estimate 16
• 10:30 US Crude Oil Inventories. Estimate 0.6M
• 12:00 US Fed Chair Powell Speaks

Thursday (November 29)

• 8:30 Canadian Current Account
• 8:30 US Core PCE Price Index. Estimate 0.2%
• 8:30 US Personal Spending. Estimate 0.4%
• 8:30 US Unemployment Claims. Estimate 221K
• 10:00 US Pending Home Sales. Estimate 0.8%
• 14:00 US FOMC Meeting Minutes

*All release times are DST

*Key events are in bold

USD/CAD for Wednesday, November 28, 2018

USD/CAD, November 28 at 8:40 EST

Open: 1.3296 High: 1.3332 Low: 1.3291 Close: 1.3330

USD/CAD Technical

USD/CAD posted small gains in the Asian session but then retracted. In European trade, the pair posted slight losses but has recovered

• 1.3292 is providing support
• 1.3383 is the next line in resistance
• Current range: 1.3292 to 1.3383

Further levels in both directions:

• Below: 1.3292, 1.3198, 1.3099 and 1.2970
• Above: 1.3383, 1.3461 and 1.3552

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