Investing.com - Last week saw the Canadian dollar hit a seven-week week high against its U.S. counterpart after the Bank of Canada indicated that it may raise interest rates in the coming months, before trimming some gains by the week’s end.
USD/CAD hit 0.9864 on Tuesday, the pair’s lowest since March 19; the pair subsequently consolidated at 0.9920 by close of trade on Friday, shedding 0.70% over the week.
The pair is likely to find support at 0.9864, Tuesday’s low and resistance at 0.9962, Thursday’s high.
The Canadian dollar rallied against the greenback on Tuesday, jumping more than 1% after the BoC’s rate statement indicated that it may hike interest rates if the domestic economic recovery continues.
“In light of the reduced slack in the economy and firmer underlying inflation, some modest withdrawal of the present considerable monetary policy stimulus may become appropriate,” the central bank said.
The BoC left its benchmark interest rate unchanged at 1% in a widely expected decision.
The bank also revised up its growth forecast for this year to 2.4% from 2%, and cut the forecast for 2013 to 2.4% from 2.8%.
The Canadian dollar was little changed against the greenback on Wednesday, after the bank’s monetary policy report struck a slightly more dovish tone than the previous day’s rate statement.
"The heightened uncertainty around the global outlook has eased from very high levels, but volatility can be expected to persist," the BoC said.
The loonie, as the Canadian dollar is also known, was lower against the greenback on Thursday, as renewed fears over high Spanish borrowing costs dampened demand for higher yielding assets
In the U.S., data on Thursday showed that manufacturing activity in the Philadelphia-region expanded at a slower rate than expected in April and U.S. existing home sales declined unexpectedly last month.
The data came after a government report showing that the number of people who filed for unemployment assistance in the U.S. in the week ending April 14 fell less-than-expected, while the previous week’s figure was revised higher.
The Department of Labor said the number of individuals filing for initial jobless benefits in the week ending April 14 fell by 2,000 to a seasonally adjusted 386,000, disappointing expectations for a decline of 18,000 to 370,000.
The previous week’s figure was revised up to 388,000 from 380,000.
The soft data sparked concerns over the strength of the U.S. economic recovery, ahead of the Federal Reserve’s two-day policy meeting this week.
Market sentiment improved ahead of the weekend after the Group of 20 leading economies agreed Friday to boost the International Monetary Fund’s lending capacity by USD430 billion, to help shield the global economy from the debt crisis roiling the euro zone.
In the week ahead, investors will be eyeing the Fed’s rate statement for any signs that the central bank is leaning towards another round of monetary easing. In addition, the U.S. is to release preliminary data on first quarter gross domestic product.
Meanwhile, Canada is to release official data on retail sales, while BoC governor Mark Carney is to speak.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, April 23
Canada is to publish official data on wholesale sales, a key gauge of consumer spending.
Tuesday, April 24
Canada is to release official data on retail sales, the primary gauge of consumer spending, which accounts for the majority of overall economic activity. Bank of Canada Governor Mark Carney is also scheduled to testify before the House of Commons Standing Committee on Finance.
Meanwhile, the U.S. is to produce a report on house price inflation, a key indicator of the housing industry’s health, as well as a Conference Board report on consumer confidence and government data on new home sales.
Wednesday, April 25
BoC Governor Mark Carney is to testify before the Senate Banking Committee in Ottawa.
The U.S. is to publish government data on durable goods orders, a leading indicator of production, and crude oil stockpiles. The Federal Reserve is to announce its benchmark interest rate and release its rate statement. Also Wednesday, U.S. Treasury Secretary Timothy Geithner is scheduled to speak.
Thursday, April 26
The U.S. is to publish government data on initial unemployment claims, an important signal of overall economic health, as well as industry data on pending home sales.
Friday, April 27
BoC Governor Carney is to speak at the Business Journal's Mayor Breakfast, in Ottawa.
The U.S. is to round up the week with preliminary data on first quarter GDP, as well as reports on the GDP price index and employment cost inflation. In addition, the University of Michigan is to release revised data on consumer sentiment.
USD/CAD hit 0.9864 on Tuesday, the pair’s lowest since March 19; the pair subsequently consolidated at 0.9920 by close of trade on Friday, shedding 0.70% over the week.
The pair is likely to find support at 0.9864, Tuesday’s low and resistance at 0.9962, Thursday’s high.
The Canadian dollar rallied against the greenback on Tuesday, jumping more than 1% after the BoC’s rate statement indicated that it may hike interest rates if the domestic economic recovery continues.
“In light of the reduced slack in the economy and firmer underlying inflation, some modest withdrawal of the present considerable monetary policy stimulus may become appropriate,” the central bank said.
The BoC left its benchmark interest rate unchanged at 1% in a widely expected decision.
The bank also revised up its growth forecast for this year to 2.4% from 2%, and cut the forecast for 2013 to 2.4% from 2.8%.
The Canadian dollar was little changed against the greenback on Wednesday, after the bank’s monetary policy report struck a slightly more dovish tone than the previous day’s rate statement.
"The heightened uncertainty around the global outlook has eased from very high levels, but volatility can be expected to persist," the BoC said.
The loonie, as the Canadian dollar is also known, was lower against the greenback on Thursday, as renewed fears over high Spanish borrowing costs dampened demand for higher yielding assets
In the U.S., data on Thursday showed that manufacturing activity in the Philadelphia-region expanded at a slower rate than expected in April and U.S. existing home sales declined unexpectedly last month.
The data came after a government report showing that the number of people who filed for unemployment assistance in the U.S. in the week ending April 14 fell less-than-expected, while the previous week’s figure was revised higher.
The Department of Labor said the number of individuals filing for initial jobless benefits in the week ending April 14 fell by 2,000 to a seasonally adjusted 386,000, disappointing expectations for a decline of 18,000 to 370,000.
The previous week’s figure was revised up to 388,000 from 380,000.
The soft data sparked concerns over the strength of the U.S. economic recovery, ahead of the Federal Reserve’s two-day policy meeting this week.
Market sentiment improved ahead of the weekend after the Group of 20 leading economies agreed Friday to boost the International Monetary Fund’s lending capacity by USD430 billion, to help shield the global economy from the debt crisis roiling the euro zone.
In the week ahead, investors will be eyeing the Fed’s rate statement for any signs that the central bank is leaning towards another round of monetary easing. In addition, the U.S. is to release preliminary data on first quarter gross domestic product.
Meanwhile, Canada is to release official data on retail sales, while BoC governor Mark Carney is to speak.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, April 23
Canada is to publish official data on wholesale sales, a key gauge of consumer spending.
Tuesday, April 24
Canada is to release official data on retail sales, the primary gauge of consumer spending, which accounts for the majority of overall economic activity. Bank of Canada Governor Mark Carney is also scheduled to testify before the House of Commons Standing Committee on Finance.
Meanwhile, the U.S. is to produce a report on house price inflation, a key indicator of the housing industry’s health, as well as a Conference Board report on consumer confidence and government data on new home sales.
Wednesday, April 25
BoC Governor Mark Carney is to testify before the Senate Banking Committee in Ottawa.
The U.S. is to publish government data on durable goods orders, a leading indicator of production, and crude oil stockpiles. The Federal Reserve is to announce its benchmark interest rate and release its rate statement. Also Wednesday, U.S. Treasury Secretary Timothy Geithner is scheduled to speak.
Thursday, April 26
The U.S. is to publish government data on initial unemployment claims, an important signal of overall economic health, as well as industry data on pending home sales.
Friday, April 27
BoC Governor Carney is to speak at the Business Journal's Mayor Breakfast, in Ottawa.
The U.S. is to round up the week with preliminary data on first quarter GDP, as well as reports on the GDP price index and employment cost inflation. In addition, the University of Michigan is to release revised data on consumer sentiment.