The Canadian dollar is trading sideways in the Monday session. Currently, USD/CAD is trading at 1.2891, down 0.04% on the day. On the release front, there are no data releases in Canada or the U.S. We’ll hear from three FOMC members – William Dudley, Loretta Mester, Randal Quarles. On Tuesday, the key event of the day is U.S. CB Consumer Confidence.
Canadian consumer data was positive on Friday, helping propel the Canadian dollar to gains of 1.6% last week. CPI, ticked lower to 0.6% but beat the estimate of 0.4%. Retail Sales rebounded with a gain of 0.9%, after a sharp loss of 1.8% in the previous release. This reading matched the estimate. There was good news south of the border, as Core Durable Goods Orders rebounded with a strong gain of 1.2%, crushing the estimate of 0.5%. This marked the strongest gain since July 2016. Durable Goods Orders jumped to an 8-month high, with a gain of 3.1%. The reading easily beat the forecast of 1.6%. The U.S. manufacturing sector continues to expand at an impressive clip, a result of stronger global growth and a cheaper U.S. dollar, which makes U.S. goods less expensive for foreign buyers.
Canada is heavily dependent on exports, so the specter of a global trade war could be disastrous for the Canadian economy. There is considerable worry in Ottawa, as U.S. President Donald Trump seems intent on “righting wrongs” in U.S. trade balances by applying the hedge hammer of tariffs. On Thursday, Trump slapped 25% tariffs on up to $60 billion worth of Chinese imports. For its part, China wasted no time in threatening to retaliate, saying it was planning to impose tariffs on 128 U.S. products, which amounted to $3 billion in imports. The tariffs directed against China come on the heels of tariffs on steel imports coming into the U.S., although the U.S. has exempted Canada and some other countries. There is serious concern that these moves could lead to a downturn in the Chinese economy and cause a global recession, a nightmarish scenario for Canadian policy-makers.
USD/CAD Fundamentals
Monday (March 26)
- 12:30 US FOMC Member William Dudley Speaks
- 16:30 US FOMC Member Loretta Mester Speaks
- 19:10 US FOMC Member Randal Quarles Speaks
Tuesday (March 27)
- 9:00 US S&P/CS Composite-20 HPI. Estimate 6.1%
- 10:00 US CB Consumer Confidence. Estimate 131.2
- 10:00 US Richmond Manufacturing Index. Estimate 23
- 11:00 US FOMC Raphael Bostic Speaks
*All release times are GMT
*Key events are in bold
USD/CAD for Monday, March 26, 2018
USD/CAD, March 26 at 8:00 EST
Open: 1.2896 High: 1.2896 Low: 1.2841 Close: 1.2885
USD/CAD Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 1.2687 | 1.2757 | 1.2850 | 1.2930 | 1.3050 | 1.3165 |
USD/CAD ticked lower in the Asian session and has recovered in European trade
- 1.2850 was tested earlier in support
- 1.2930 in the next resistance line
- Current range: 1.2850 to 1.2930
Further levels in both directions:
- Below: 1.2850, 1.2757 and 1.2687
- Above: 1.2930, 1.3050, 1.3165 and 1.3260
OANDA’s Open Positions Ratio
USD/CAD ratio is almost unchanged in the Monday session. Currently, short positions have a majority (58%), indicative of USD/CAD breaking out and moving lower.
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