The Canadian dollar has slipped 1.3% this week and continues to lose ground in the Wednesday session. Early in North American trade, the pair is trading at 1.3274, up 0.46% on the day. On the release front, there are no Canadian releases. In the U.S., unemployment claims dropped to 234,000, but this was above the estimate of 220,000. On Friday, Canada releases employment change and the unemployment rate.
Canadian numbers were mixed on Wednesday. Ivey PMI, key gauge of economic activity, fell to 54.7 in January, its weakest score in four months. Building Permits was unexpectedly strong, jumping 6.0% in December. This was its strongest gain since May 2017.
With the Canadian economy showing signs of a slowdown, the mood of consumers remains fragile. Low oil prices and a weaker global economy have lowered demand for Canadian exports and weighed on inflation and wage levels. Consumer confidence is a strong barometer of the economy’s health, and if weaker consumer sentiment translates into decreased consumer spending, the economy could falter and drag down the Canadian dollar.
Meanwhile, the Bank of Canada appears to have taken page out of the Federal Reserve’s playbook, and is expected to ease monetary policy this year after aggressively raising rates in 2018. On Wednesday, BoC Deputy Governor Tim Lane said that Canada’s fundamentals were strong and unemployment was at historically-low rates. However, Lane noted that the Canadian dollar was under pressure due to lower oil prices, a soft housing market and a decline in business investment due to uncertainty over U.S. trade policies.
Thursday (February 7)
Friday (February 8)
*All release times are EST
*Key events are in bold
USD/CAD for Thursday, February 7, 2019
USD/CAD, February 7 at 8:35 EST
Open: 1.3213 High: 1.3258 Low: 1.3207 Close: 1.3274
USD/CAD posted slight gains in the Asian and European sessions
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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