Investing.com - The Canadian dollar slumped to a two-year low against the U.S. dollar on Friday, as lower oil prices and expectations that the Federal Reserve will soon start to taper stimulus weighed.
USD/CAD hit session highs of 1.0627 on Friday, the highest since October 2011, before ending the session at 1.0613. For the week, the pair advanced 0.84%.
The pair is likely to find support at 1.0555 and resistance at 1.0655.
The Canadian dollar initially rose to session highs against the U.S. dollar after official data showed that Canada’s economy grew 0.7% in the third quarter, following growth of 0.4% in the previous quarter.
On a month-over-month basis, the Canadian economy grew 0.3% in September, above expectations for growth of 0.1%.
But the loonie, as the Canadian dollar is also known, gave up gains as demand for the greenback continued to be underpinned by the view that the Federal Reserve could start to unwind its USD85 billion-a-month asset purchase program before the end of the year.
Lower oil prices also pressured the Canadian dollar. Nymex crude oil ended the month down 3.2% at USD92.72 a barrel as ongoing concerns over rising U.S. inventories and increased production levels weighed.
Crude oil is Canada’s largest export and the country’s currency is very sensitive to fluctuations in crude prices.
In the week ahead, investors will be focusing on Friday’s U.S. nonfarm payrolls report for November, for indications on the timing of a possible reduction in Fed stimulus. The U.S. is also to release revised data on third quarter growth.
The outcome of the Bank of Canada’s latest policy meeting will also be in focus.
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 Tuesday as there are no relevant events on this day.
Monday, December 2
Federal Reserve Chairman Ben Bernanke is to speak at an event in Washington. Later Monday, the Institute of Supply Management is to release its manufacturing PMI.
Wednesday, December 4
The U.S. is to release the ADP report on private sector job creation, which leads the government’s nonfarm payrolls report by two days. The Institute of Supply Management is to release its services PMI and the U.S is also to publish data on new home sales.
Both the U.S. and Canada are to release data on the trade balance, the difference in value between imports and exports.
The BoC is to announce its benchmark interest rate and publish its rate statement, which outlines economic conditions and the factors affecting the bank’s decision.
Thursday, December 5
Canada is to publish data on building permits and the Ivey PMI.
The U.S. is to publish a revised estimate of third quarter gross domestic product, the broadest indicator of economic activity and the leading indicator of economic growth. Meanwhile, the Labor Department is to release its weekly report on initial jobless claims. The U.S. is also to publish data on factory orders.
Friday, December 6
Canada is to release data on the change in the number of people employed and the unemployment rate.
The University of Michigan is to release the preliminary reading of its consumer sentiment index. The U.S. is to round up the week with the closely watched government data on nonfarm payrolls and the unemployment rate.
USD/CAD hit session highs of 1.0627 on Friday, the highest since October 2011, before ending the session at 1.0613. For the week, the pair advanced 0.84%.
The pair is likely to find support at 1.0555 and resistance at 1.0655.
The Canadian dollar initially rose to session highs against the U.S. dollar after official data showed that Canada’s economy grew 0.7% in the third quarter, following growth of 0.4% in the previous quarter.
On a month-over-month basis, the Canadian economy grew 0.3% in September, above expectations for growth of 0.1%.
But the loonie, as the Canadian dollar is also known, gave up gains as demand for the greenback continued to be underpinned by the view that the Federal Reserve could start to unwind its USD85 billion-a-month asset purchase program before the end of the year.
Lower oil prices also pressured the Canadian dollar. Nymex crude oil ended the month down 3.2% at USD92.72 a barrel as ongoing concerns over rising U.S. inventories and increased production levels weighed.
Crude oil is Canada’s largest export and the country’s currency is very sensitive to fluctuations in crude prices.
In the week ahead, investors will be focusing on Friday’s U.S. nonfarm payrolls report for November, for indications on the timing of a possible reduction in Fed stimulus. The U.S. is also to release revised data on third quarter growth.
The outcome of the Bank of Canada’s latest policy meeting will also be in focus.
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 Tuesday as there are no relevant events on this day.
Monday, December 2
Federal Reserve Chairman Ben Bernanke is to speak at an event in Washington. Later Monday, the Institute of Supply Management is to release its manufacturing PMI.
Wednesday, December 4
The U.S. is to release the ADP report on private sector job creation, which leads the government’s nonfarm payrolls report by two days. The Institute of Supply Management is to release its services PMI and the U.S is also to publish data on new home sales.
Both the U.S. and Canada are to release data on the trade balance, the difference in value between imports and exports.
The BoC is to announce its benchmark interest rate and publish its rate statement, which outlines economic conditions and the factors affecting the bank’s decision.
Thursday, December 5
Canada is to publish data on building permits and the Ivey PMI.
The U.S. is to publish a revised estimate of third quarter gross domestic product, the broadest indicator of economic activity and the leading indicator of economic growth. Meanwhile, the Labor Department is to release its weekly report on initial jobless claims. The U.S. is also to publish data on factory orders.
Friday, December 6
Canada is to release data on the change in the number of people employed and the unemployment rate.
The University of Michigan is to release the preliminary reading of its consumer sentiment index. The U.S. is to round up the week with the closely watched government data on nonfarm payrolls and the unemployment rate.