Investing.com - The U.S. dollar ended the week sharply lower against its Canadian counterpart on Friday, but the greenback found some support amid renewed fears of a global economic slowdown and as expectations for fresh easing by the European Central Bank faded.
USD/CAD hit 0.9904 on Friday, the pair’s lowest since May 4; the pair subsequently consolidated at 0.9907 by close of trade on Friday, tumbling 1.05% over the week.
The pair is likely to find support at 0.9860, the low of May 4 and resistance at 0.9988, the high of August 8.
The commodity-linked loonie strengthened last week, as light sweet crude futures for delivery in September settled at USD93.35 a barrel on the New York Mercantile Exchange by close of trade on Friday, jumping 2.2% over the week.
Raw materials, including oil account for about half of Canada’s export revenue.
But the safe haven greenback remained supported on Friday, after data showed that Chinese exports grew just 1.0% on the year in July, down from the 11.3% gain seen in June, while imports rose 4.7% year-over-year, down from 6.3% in June.
Adding to global growth concerns, the European Central Bank said in its monthly bulletin on Thursday that the economic outlook for the euro zone faced a number of downside risks, with financial market tensions and their potential impact on growth posing the key threats.
The ECB revised down its forecast for economic growth to 0.6% in 2013, down from 1% previously and forecast a 0.3% contraction in growth this year, slightly worse than its previous forecast of for a 0.2% contraction.
Meanwhile, optimism that the ECB will soon move to cut high Spanish and Italian borrowing costs faded as investors waited for more details of the bank’s proposed bond buying program to emerge.
The greenback also found support after robust employment and trade data eased concerns over the U.S. economic outlook.
The Department of Labor said that the number of people who filed for unemployment assistance in the U.S. declined to 361,000 last week, from an upwardly revised 367,000 in the previous week, against expectations for an increase to 370,000.
A separate report showed that the U.S. trade deficit dropped to USD42.9 billion in June, its lowest level in two-and-a-half years.
In Canada, official data showed on Friday that the economy 30,400 jobs in July, disappointing expectations for a 9,600 rise and following a 7,300 increase the previous month.
Canada’s unemployment rate rose unexpectedly to 7.3% in July from 7.2% the previous month. Analysts had expected the unemployment rate to remain unchanged in July.
In the week ahead, market participants will be awaiting data on second quarter growth from the euro zone and looking ahead to central bank minutes from the Bank of Japan and the Bank of England, amid ongoing speculation that world central banks may take steps to shore up economic growth.
Investors will also watching U.S. data on retail sales, inflation and housing in an attempt to assess the strength of the U.S. economic recovery.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The guide skips Monday, as there are no relevant events on that day.
Tuesday, August 14
The U.S. is to publish official data on retail sales and producer price inflation, followed by data on business inventories.
Wednesday, August 15
The U.S. is to release official data on consumer price inflation, as well as a report on manufacturing activity in the New York area and government data on net long term securities transactions. The Federal Reserve is also to produce data on the capacity utilization rate and industrial production, followed by a government report on crude oil inventories.
Thursday, August 16
Canada is to produce official data on foreign securities purchases and on manufacturing sales, a key indicator of economic health.
The U.S. is to publish official data on building permits, a key gauge of future construction activity, as well as weekly government data on unemployment claims. The country is also to release official data on housing starts and a report on manufacturing activity in the Philadelphia area.
Friday, August 17
Canada is to release official data on consumer price inflation.
The U.S. is to round up the week with a preliminary report by the University of Michigan on consumer sentiment and inflation expectations.
USD/CAD hit 0.9904 on Friday, the pair’s lowest since May 4; the pair subsequently consolidated at 0.9907 by close of trade on Friday, tumbling 1.05% over the week.
The pair is likely to find support at 0.9860, the low of May 4 and resistance at 0.9988, the high of August 8.
The commodity-linked loonie strengthened last week, as light sweet crude futures for delivery in September settled at USD93.35 a barrel on the New York Mercantile Exchange by close of trade on Friday, jumping 2.2% over the week.
Raw materials, including oil account for about half of Canada’s export revenue.
But the safe haven greenback remained supported on Friday, after data showed that Chinese exports grew just 1.0% on the year in July, down from the 11.3% gain seen in June, while imports rose 4.7% year-over-year, down from 6.3% in June.
Adding to global growth concerns, the European Central Bank said in its monthly bulletin on Thursday that the economic outlook for the euro zone faced a number of downside risks, with financial market tensions and their potential impact on growth posing the key threats.
The ECB revised down its forecast for economic growth to 0.6% in 2013, down from 1% previously and forecast a 0.3% contraction in growth this year, slightly worse than its previous forecast of for a 0.2% contraction.
Meanwhile, optimism that the ECB will soon move to cut high Spanish and Italian borrowing costs faded as investors waited for more details of the bank’s proposed bond buying program to emerge.
The greenback also found support after robust employment and trade data eased concerns over the U.S. economic outlook.
The Department of Labor said that the number of people who filed for unemployment assistance in the U.S. declined to 361,000 last week, from an upwardly revised 367,000 in the previous week, against expectations for an increase to 370,000.
A separate report showed that the U.S. trade deficit dropped to USD42.9 billion in June, its lowest level in two-and-a-half years.
In Canada, official data showed on Friday that the economy 30,400 jobs in July, disappointing expectations for a 9,600 rise and following a 7,300 increase the previous month.
Canada’s unemployment rate rose unexpectedly to 7.3% in July from 7.2% the previous month. Analysts had expected the unemployment rate to remain unchanged in July.
In the week ahead, market participants will be awaiting data on second quarter growth from the euro zone and looking ahead to central bank minutes from the Bank of Japan and the Bank of England, amid ongoing speculation that world central banks may take steps to shore up economic growth.
Investors will also watching U.S. data on retail sales, inflation and housing in an attempt to assess the strength of the U.S. economic recovery.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The guide skips Monday, as there are no relevant events on that day.
Tuesday, August 14
The U.S. is to publish official data on retail sales and producer price inflation, followed by data on business inventories.
Wednesday, August 15
The U.S. is to release official data on consumer price inflation, as well as a report on manufacturing activity in the New York area and government data on net long term securities transactions. The Federal Reserve is also to produce data on the capacity utilization rate and industrial production, followed by a government report on crude oil inventories.
Thursday, August 16
Canada is to produce official data on foreign securities purchases and on manufacturing sales, a key indicator of economic health.
The U.S. is to publish official data on building permits, a key gauge of future construction activity, as well as weekly government data on unemployment claims. The country is also to release official data on housing starts and a report on manufacturing activity in the Philadelphia area.
Friday, August 17
Canada is to release official data on consumer price inflation.
The U.S. is to round up the week with a preliminary report by the University of Michigan on consumer sentiment and inflation expectations.