The Canadian dollar has posted slight gains in the Thursday session. Currently, USD/CAD is trading at 1.3094, down 0.15% on the day. On the release front, Canada housing starts had been expected to climb to 199,000. As well, the New Housing Price Index is forecast to tick higher to 0.1%. In the U.S., all eyes are on the Federal Reserve, which winds up its policy meeting and releases a policy statement. On Friday, the U.S. releases Producer Price Index reports and UoM Consumer Sentiment.
Canada’s economy remains strong, and this was underscored Thursday by a superb reading from Ivey PMI, a key gauge of economic activity. The indicator surged to 61.8 in November, up sharply from 50.4 in October. This reading easily beat the estimate of 50.9 points. Earlier this week, Bank of Canada Governor Stephen Poloz said that the Bank would continue gradually raising rates from the current 1.75% to a “neutral stance” of between 2.5% and 3.5%. The magic question for investors is how quickly the BoC will move in this direction. The BoC has raised rates some five times in the past 15 months, and upcoming rate hikes will help make the Canadian dollar an attractive option for investors.
Global stock markets reacted with relief on Wednesday, after the conclusion of the U.S. mid-term elections. Major indices on Wall Street were up by about 2 percent, as the uncertainty over the election is over and the slugfest ended up as a split-decision. The Democrats won back the House of Representatives, but the Republicans held on to the Senate. Had the Democrats taken back both houses of Congress, Trump would have been a lame duck for the next two years, and he would have had great difficulty passing any further market-friendly reforms. With risk appetite remaining steady, the Canadian dollar has managed to hold its own this week.
USD/CAD, November 8 at 7:20 DST
Open: 1.3109 High: 1.3159 Low: 1.3056 Close: 1.3094
USD/CAD ticked higher in the Asian session. The pair has reversed directions in European trade and posted losses.
Further levels in both directions:
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.
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