The Canadian dollar has edged lower in the Friday session, erasing the gains seen on Thursday. Currently, USD/CAD is trading at 1.3237, up 0.34% on the day. On the release front, Canada releases key consumer inflation and spending data. CPI posted a gain of 0.3%, after two straight declines. Core retail sales, which was forecast to post a 0.3% gain, posted a 0.1% loss and retail sales, which was expected at come in with a 0.1% gain, posted a 0.2% increase. The U.S. will release services and manufacturing PMI reports.
A tumultuous week on global stock markets caused plenty of jitters for investors. That translated into bad news for the Canadian dollar, as risk appetite waned. The Canadian currency was down as much as 1.3% earlier this week, but has recovered some of these losses after stock markets reversed directions and moved higher. The rout was triggered by a sharp drop in technology stocks, as the ongoing tariff war between the U.S. and China threatens economic growth and has dampened investor confidence. The stakes are high, as the markets hope for a breakthrough at the G20 summit in Argentina next week, when President Donald Trump meets with Chinese leader Xi Jinping. If the two leaders can lower trade tensions between the U.S. and China, the Canadian dollar could respond with gains.
The markets have grown accustomed to strong economic numbers from the U.S., but quarterly GDP reports point to a slowdown, and there has even been talk of a recession. This has led to speculation that the Federal Reserve could ease up on its interest rate hikes next year. Only a few weeks ago, there were expectations that the Fed could raise rates each quarter in 2019, but the mood has become more cautious. The U.S.-China trade war has caused a slowdown both economies, and Trump’s $1.5-trillion tax cut has boosted the economy, but its effect on the economy is fading. A rollback in U.S. rate hikes would make the greenback less attractive to investors, which would be good news for the Canadian dollar.
USD/CAD for Friday, November 23, 2018
USD/CAD, November 23 at 6:10 EST
Open: 1.3192 High: 1.3241 Low: 1.3185 Close: 1.3237
USD/CAD Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 1.2970 | 1.3099 | 1.3198 | 1.3292 | 1.3383 | 1.3461 |
USD/CAD ticked higher in the Asian session and has posted more gains in European trade
- 1.3198 is providing support
- 1.3292 is under pressure in resistance. This line could break in the North American session
- Current range: 1.3198 to 1.3292
Further levels in both directions:
- Below: 1.3198, 1.3099, 1.2970 and 1.2831
- Above: 1.3292, 1.3383 and 1.3461
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