The Canadian dollar is unchanged on Thursday, following considerable losses in the Wednesday’s session. In North American trade, USD/CAD is trading at the 1.35 line. There is only one Canadian indicator on the schedule. Corporate Profits posted an excellent gain of 14%, marking a five-month high. US markets are closed for the Thanksgiving holiday, so there are no US events until Friday.
USD/CAD posted strong gains on Wednesday, bolstered by excellent durable goods reports out of the US. Core Durable Goods Orders rose 1.0%, well above the estimate of 0.2%. Durable Goods Orders surged 4.8%, crushing the estimate of 1.2%. These strong numbers point to a welcome improvement in business investment, and strong consumer fundamentals could see business spending numbers continue to improve. There was positive news on the consumer front, as the UoM Consumer Sentiment index climbed to 93.8, above the forecast of 91.6.
Canadian retail sales numbers for September were mixed. Core Retail Sales remained stuck at 0.0%, well short of the estimate of 0.6%. However, Retail Sales rebounded with a gain of 0.6%, just shy of the forecast of 0.7%. Canadian indicators have started off the week on a sour note. Wholesale Sales, a leading indicator of consumer spending, was well off the estimate. The indicator fell 1.2% in September, its first decline since March. The markets had expected a gain of 0.3%.
The US dollar has been on an impressive role since Donald Trump won the US election earlier this month. With a Fed rate hike in December a near-certainty, sentiment towards the dollar should remain high. However, Trump’s economic policy remains a mystery, so what will happen in early 2017 is a big question mark which could translate into volatility in the markets. Trump’s election platforms of increased spending and less taxes have been short on content and we will have to wait for the new Trump administration to unveil a detailed economic platform. Where does this leave the Federal Reserve? The Fed is in favor of gradual rate hikes next year, but this assumes that the US economy continues to strengthen. In testimony before a congressional committee last week, Fed chair Janet Yellen acknowledged the uncertainty created by Trump’s victory and said that the Fed might have to adjust its outlook, based on the new president’s economic policies.
USD/CAD Fundamentals
Thursday (November 24)
- 8:30 Canadian Corporate Profits. Actual 14%
*All release times are EST
*Key events are in bold
USD/CAD for Thursday, November 24, 2016
USD/CAD November 24 at 10:15 EST
Open: 1.3501 High: 1.3535 Low: 1.3476 Close: 1.3502
USD/CAD Technical
| S1 | S2 | S1 | R1 | R2 | R3 |
| 1.3253 | 1.3371 | 1.3457 | 1.3551 | 1.3648 | 1.3782 |
- USD/CAD posted small gains in the Asian session but reversed directions and lost ground in European trade. Early in the North American session, the pair is unchanged
- 1.3457 is a weak line
- There is resistance at 1.3551
Further levels in both directions:
- Below: 1.3457, 1.3371, 1.3253 and 1.3120
- Above: 1.3551, 1.3648 and 1.3782
- Current range: 1.3457 to 1.3551
OANDA’s Open Positions Ratio
USD/CAD ratio has remained unchanged all week. In the Thursday session, short positions command a strong majority (59%), indicative of trader bias towards USD/CAD reversing breaking out and moving to lower ground.