The Canadian dollar continues to trade quietly. In the Thursday session, USD/CAD is trading at 1.2905, down 0.14% on the day. On the release front, Canada releases the monthly GDP report and the Raw Materials Price Index. There are a host of key indicators in the U.S., led by unemployment claims and consumer confidence. The markets are expecting unemployment claims to tick higher to 230,000, while UoM Consumer Sentiment is forecast to rise to 131.2 points.
The U.S. economy continues to show strong expansion. Revised GDP for the third quarter came in at 2.9%, beating the estimate of 2.7%. This reading was revised upwards from the initial GDP estimate of 2.5%. Fourth quarter growth, although solid, could not keep up with a superb third quarter, which posted a gain of 3.2%. As for 2018, first quarter growth is expected to soften to 1.8%, but there is still a strong chance that the economy could hit 3% growth this year, as promised by U.S. President Donald Trump. The catalysts for such a rosy prediction are the massive tax cut and higher government spending. Where does this leave the Federal Reserve, which raised interest rates last week? Currently, the Fed is projecting to more rate hikes this year, but if the economy remains strong and inflation levels move closer to the Fed target of 2%, we could see four rate increases in 2018.
Negotiations over the NAFTA agreement continue, and positive statements from U.S. negotiators have raised hopes that a new agreement will be reached between Canada, Mexico and the U.S. A key sticking point has been a U.S. demand to increase the U.S. content in vehicles made in NAFTA members, but the Trump administration has apparently backed down on this requirement. The gloomy air around the talks has improved, and there is cautious optimism that the sides can hammer out a new agreement in the next few weeks.
USD/CAD Fundamentals
Thursday (March 29)
- 8:30 Canadian GDP. Estimate 0.1%
- 8:30 Canadian RMPI. Estimate 2.8%
- 8:30 Canadian IPPI. Estimate 0.4%
- 8:30 Canadian RMPI. Estimate 2.8%
- 8:30 US Core PCE Price Index. Estimate 0.2%
- 8:30 US Personal Spending. Estimate 0.2%
- 8:30 US Unemployment Claims Estimate 230K
- 9:45 Chicago PMI. Estimate 62.1
- 10:00 US Revised UoM Consumer Sentiment. Estimate 101.9
- 10:00 US Revised UoM Consumer Sentiment. Estimate 101.9
- 10:00 US Revised UoM Inflation Expectations
- 10:30 US Natural Gas Storage. Estimate -75B
*All release times are GMT
*Key events are in bold
USD/CAD for Thursday, March 29, 2018
USD/CAD, March 29 at 7:45 EST
Open: 1.2924 High: 1.2931 Low: 1.2902 Close: 1.2905
USD/CAD Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 1.2687 | 1.2757 | 1.2850 | 1.2930 | 1.3050 | 1.3165 |
USD/CAD was flat in the Asian session. In European trade, the pair edged higher but then retracted
- 1.2850 is providing support
- 1.2930 is a weak 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 showing limited movement this week. Currently, short positions have a majority (56%), indicative of USD/CAD continuing to move lower.
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