The Canadian dollar has rebounded on Wednesday, after three straight winning sessions. In the North American session, USD/CAD is trading at 1.2819, down 0.45% on the day. On the release front, Canadian Manufacturing Production dropped to 1.4%, but still beat the estimate of 1.1%. In the U.S., construction numbers were mixed. Building Permits remained steady at 1.35 million, matching the forecast. Housing Starts dropped to 1.29 million, short of the estimate of 1.32 million.
In the U.S., retail sales reports were shy of the estimates in April, but investors preferred to focus on the positive, noting that both retail sales and core retail sales posted gains, as consumer spending is improving after a sluggish first quarter. A new concern is higher gas prices, which could put a dent in consumers’ wallets and hurt spending. Oil prices have hit their highest levels in over 3 years, and with the U.S. leaving the Iran nuclear deal and escalating tensions in the Middle East, gasoline prices could remain at high levels.
The Trump administration is offering Canada a carrot (or is it more of a stick?) in the NAFTA negotiations. At the end of April, Trump gave both Canada and Mexico another 30-day exemption on steel and aluminum tariffs, lasting until June 1. Earlier in the week, U.S. Commerce Secretary Wilbur Ross said that further extensions could be granted, depending on the progress made in the NAFTA talks. Ottawa has demanded “full and permanent” exemptions from the tariffs, but may have to cough up more concessions in the NAFTA talks in order to convince Washington to exempt Canadian steel and aluminum imports from tariffs.
Wednesday (May 16)
Thursday (May 17)
*All release times are DST
*Key events are in bold
USD/CAD for Wednesday, May 16, 2018
USD/CAD, May 16 at 9:40 DST
Open: 1.2878 High: 1.2877 Low: 1.2813 Close: 1.2818
USD/CAD showed limited movement in the Asian and European sessions. The pair has edged lower in North American trade
Further levels in both directions:
OANDA’s Open Positions Ratio
USD/CAD ratio is almost unchanged in the Wednesday session Currently, short positions have a majority (54%), indicative of trader bias towards USD/CAD continuing to move downwards.
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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