USD/CAD – Steady As Canadian GDP Slips But Matches Forecast

USD/CAD is not showing much movement on Wednesday, as the pair trades in the high-1.09 range in the North American session. There is plenty of action today on both sides of the border. In the US, ADP Nonfarm Payrolls looked strong but Advance GDP slipped badly in March. Later in the day, the Federal Reserve releases a policy statement, and we could see another trim to QE. In Canada, GDP posted a weak gain but managed to meet the estimate.

ADP Nonfarm Payrolls were released on Wednesday, ahead of the critical official NFPs later in the week. The news was positive, as the indicator jumped to 220 thousand, marking a four-month low. This easily beat the estimate of 203 thousand. Advance GDP couldn’t keep pace, as the key indicator’s upward swing came to a crashing halt, with a Q1 gain of just 0.1%, compared to a 3.2% reading in Q4. This was well off the estimate of 1.2%. Is the US economy stalling? The weak reading could be a result of a harsh winter, but this will be of little consolation to the markets, and the dollar could lose ground against its major rivals.

The markets are keeping a close eye on the Federal Reserve, which will issue a policy statement later in the day. The Fed is expected to trim QE by another $10 billion, which would reduce the asset purchase scheme to $45 billion. If US numbers remain steady, the Fed plans to wind up QE before the end of 2014, at which time the guessing game of when interest rates might rise will begin in earnest. Meanwhile, further tapers to QE represent a vote of confidence in the US economy, so the greenback could post gains against the major currencies following another trim.

US consumers appear to be optimistic about the economy, according to the latest consumer confidence data. CB Consumer Confidence, a key indicator, posted its second straight reading of 82.3 points in March. This was shy of the estimate of 82.9, but the indicator remains at high levels. Earlier in the week, the UoM Consumer Sentiment jumped to 84.1 points in March, beating the estimate of 83.2. It marked the indicator’s highest level since June. If this optimism continues and translates into increased consumer spending, this should bode well for the US economy.

Canadian GDP didn’t give the markets much to cheer about. The key economic indicator is released monthly, unlike its US counterpart which is issued every quarter. The indicator dipped to 0.2%, down from 0.5% a month earlier. However, this matched the estimate, so the markets didn’t raise too many eyebrows and the loonie has managed to hold its own as it continues to trade slightly below the 1.10 barrier.

USD/CAD for Wednesday, April 30, 2014

USD/CAD April 30 at 15:00 GMT

USD/CAD 1.0972 H: 1.0979 L: 1.0944

USD/CAD Technical

• USD/CAD is uneventful in Wednesday trading.
• 1.0906 is providing support. This is followed by a support line at 1.0852, which has held since January.
• 1.10, a key level, remains a resistance line. This is followed by 1.1177.
• Current range: 1.0906 to 1.10

Further levels in both directions:

• Below: 1.0906, 1.0852, 1.0775 and 1.0706
• Above: 1.10, 1.1094, 1.1177, 1.1319 and 1.1496

OANDA’s Open Positions Ratio

USD/CAD ratio is pointing to gains in long positions in Wednesday trading. This is reflected in the current movement of the pair, as the Canadian dollar has posted small gains. The ratio has a majority of long positions, indicative of a trader bias in favor of the US dollar moving to higher ground.

The Canadian dollar is steady on Wednesday. In the North American session, USD/CAD is stable.

USD/CAD Fundamentals

• 12:15 US ADP Nonfarm Employment Change. Estimate 203K. Actual 220K.
• 12:30 Canadian GDP. Estimate 0.2%. Actual 0.2%.
• 12:30 Canadian RMPI. Estimate 1.2%. Actual 0.6%.
• 12:30 Canadian IPPI. Estimate 0.6%. Actual 0.4%.
• 12:30 US Advance GDP. Estimate 1.2%. Actual 0.1%.
• 12:30 US Advance GDP Price Index. Estimate 1.6%. Actual 1.3%.
• 12:30 US Employment Cost Index. Estimate 0.5%. Actual 0.3%.
• 13:45 US Chicago PMI. Estimate 56.6 points. Actual 63.0 points.
• 14:30 US Crude Oil Inventories. Estimate 1.3M. Actual 1.7M.
• 18:00 US FOMC Statement.
• 18:00 US Federal Funds Rate. Estimate <0.25%.
• 20:15 Bank of Canada Governor Stephen Poloz Speaks. Poloz will testify before the House of Commons Banking, Trade and Commerce Committee in Ottawa.

*Key releases are highlighted in bold

*All release times are GMT

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