Investing.com - The U.S. dollar rose against its Canadian counterpart on Friday, trimming some of the week’s losses as a decline in crude oil prices weighed on demand for the loonie, while investors eyed ongoing discussions on restructuring Greece’s sovereign debt.
USD/CAD hit 1.0070 on Thursday, the pair’s lowest since December 8; the pair subsequently consolidated at 1.0129 by close of trade on Friday, shedding 1.11% over the week.
The pair is likely to find support at 1.0070, the low of January 19 and resistance at 1.0187, the high of January 17.
Crude oil for delivery in March traded at USD98.39 a barrel by close of trade Friday, down 0.6% on the week. It was the lowest settlement price since December 21.
Raw materials, including oil account for about half of Canada’s export revenue.
Meanwhile, officials said that Greece was nearing an agreement with creditors on a debt restructuring deal, aimed at erasing EUR100 billion of the country’s EUR360 billion debt burden and securing another tranche of international aid.
Earlier Friday, industry data showed that existing home sales in the U.S. rose less-than-expected in December, advancing to 4.61 million after a rise to 4.39 million the previous month. Analysts had expected existing home sales to rise to 4.65 million in December.
In Canada, official data showed core consumer price inflation fell more-than-expected in December, ticking down 0.5% after a 0.1% rise the previous month, while consumer price inflation declined 0.6%, confounding expectations for a 0.1% fall in December.
A separate report showed that wholesale sales in Canada fell unexpectedly in November, declining 0.4% after a 0.9% rise the previous month. Analysts had expected wholesale sales to rise 0.8% in November.
The greenback fell broadly earlier in the week as successful government debt auctions by Spain and France eased concerns that borrowing costs for euro zone countries would rise, after ratings downgrades on the countries by Standard & Poor's earlier in the month.
Spain sold EUR6.61 billion of medium to long-term debt at broadly lower yields, exceeding the maximum target of EUR4.5 billion set for the auction, while France auctioned EUR7.97 billion of medium and long-term securities.
Safe haven demand also weakened after the International Monetary Fund said it wanted to increase its lending capacity by as much as USD500 billion, having identified a potential need for USD1 trillion in coming years.
The greenback extended losses against the loonie on Thursday after the U.S. Department of Labor said the number of people who filed for unemployment assistance in the week ending January 13 declined unexpectedly, falling to the lowest level in almost four years.
The number of individuals filing for initial jobless benefits fell to 352,000 from 402,000 the previous week, surpassing expectations for a fall to 385,000.
Separate reports showed that U.S. consumer price inflation was flat in December, while U.S. housing starts dropped 4.1% to a 657,000 annual rate last month.
Earlier in the week, the Bank of Canada said the outlook for the global economy had “deteriorated” after it left its benchmark interest rate unchanged at 1%.
In its rate statement on Tuesday, the BoC said the uncertainty over the global economic outlook had increased since its October monetary policy report, adding that the recession in Europe was expected to be “deeper and longer" than earlier forecast.
In the coming week, investors will be eyeing developments in the euro zone, with finance ministers from the single currency bloc meeting in Brussels on Monday, with Greece’s debt restructuring deal likely to be at the top of the agenda.
Markets will also be closely watching the outcome of Thursday’s Federal Reserve policy setting meeting, as well as Friday’s preliminary data on U.S. fourth-quarter gross domestic product.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, January 23
Canada is to publish its index of leading economic indicators, which is designed to predict the direction of the economy over the coming months.
Tuesday, January 24
Canada is to publish official data on retail sales, the primary gauge of consumer spending, which accounts for the majority of overall economic activity.
Wednesday, January 25
The U.S. is to release industry data on pending home sales, a leading indicator of demand in the housing market, as well as official data on crude oil stockpiles. The data can be a big market mover for the loonie due to the size of Canada's energy sector. The Federal Reserve is to announce the federal funds rate and publish its official rate statement.
Elsewhere, the World Economic Forum is to begin its five-day annual meeting in Davos in Switzerland where Bank of Canada Governor Mark Carney is due to speak.
Thursday, January 26
In the U.S., official data is to be produced on durable goods, an important indicator of production, as well as on unemployment claims and new home sales, a key gauge of economic health.
Friday, January 27
The U.S. is to round up the week with preliminary data on the country’s fourth quarter GDP and GDP price index, followed by a revised data from the University of Michigan on consumer sentiment and inflation expectations.
USD/CAD hit 1.0070 on Thursday, the pair’s lowest since December 8; the pair subsequently consolidated at 1.0129 by close of trade on Friday, shedding 1.11% over the week.
The pair is likely to find support at 1.0070, the low of January 19 and resistance at 1.0187, the high of January 17.
Crude oil for delivery in March traded at USD98.39 a barrel by close of trade Friday, down 0.6% on the week. It was the lowest settlement price since December 21.
Raw materials, including oil account for about half of Canada’s export revenue.
Meanwhile, officials said that Greece was nearing an agreement with creditors on a debt restructuring deal, aimed at erasing EUR100 billion of the country’s EUR360 billion debt burden and securing another tranche of international aid.
Earlier Friday, industry data showed that existing home sales in the U.S. rose less-than-expected in December, advancing to 4.61 million after a rise to 4.39 million the previous month. Analysts had expected existing home sales to rise to 4.65 million in December.
In Canada, official data showed core consumer price inflation fell more-than-expected in December, ticking down 0.5% after a 0.1% rise the previous month, while consumer price inflation declined 0.6%, confounding expectations for a 0.1% fall in December.
A separate report showed that wholesale sales in Canada fell unexpectedly in November, declining 0.4% after a 0.9% rise the previous month. Analysts had expected wholesale sales to rise 0.8% in November.
The greenback fell broadly earlier in the week as successful government debt auctions by Spain and France eased concerns that borrowing costs for euro zone countries would rise, after ratings downgrades on the countries by Standard & Poor's earlier in the month.
Spain sold EUR6.61 billion of medium to long-term debt at broadly lower yields, exceeding the maximum target of EUR4.5 billion set for the auction, while France auctioned EUR7.97 billion of medium and long-term securities.
Safe haven demand also weakened after the International Monetary Fund said it wanted to increase its lending capacity by as much as USD500 billion, having identified a potential need for USD1 trillion in coming years.
The greenback extended losses against the loonie on Thursday after the U.S. Department of Labor said the number of people who filed for unemployment assistance in the week ending January 13 declined unexpectedly, falling to the lowest level in almost four years.
The number of individuals filing for initial jobless benefits fell to 352,000 from 402,000 the previous week, surpassing expectations for a fall to 385,000.
Separate reports showed that U.S. consumer price inflation was flat in December, while U.S. housing starts dropped 4.1% to a 657,000 annual rate last month.
Earlier in the week, the Bank of Canada said the outlook for the global economy had “deteriorated” after it left its benchmark interest rate unchanged at 1%.
In its rate statement on Tuesday, the BoC said the uncertainty over the global economic outlook had increased since its October monetary policy report, adding that the recession in Europe was expected to be “deeper and longer" than earlier forecast.
In the coming week, investors will be eyeing developments in the euro zone, with finance ministers from the single currency bloc meeting in Brussels on Monday, with Greece’s debt restructuring deal likely to be at the top of the agenda.
Markets will also be closely watching the outcome of Thursday’s Federal Reserve policy setting meeting, as well as Friday’s preliminary data on U.S. fourth-quarter gross domestic product.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, January 23
Canada is to publish its index of leading economic indicators, which is designed to predict the direction of the economy over the coming months.
Tuesday, January 24
Canada is to publish official data on retail sales, the primary gauge of consumer spending, which accounts for the majority of overall economic activity.
Wednesday, January 25
The U.S. is to release industry data on pending home sales, a leading indicator of demand in the housing market, as well as official data on crude oil stockpiles. The data can be a big market mover for the loonie due to the size of Canada's energy sector. The Federal Reserve is to announce the federal funds rate and publish its official rate statement.
Elsewhere, the World Economic Forum is to begin its five-day annual meeting in Davos in Switzerland where Bank of Canada Governor Mark Carney is due to speak.
Thursday, January 26
In the U.S., official data is to be produced on durable goods, an important indicator of production, as well as on unemployment claims and new home sales, a key gauge of economic health.
Friday, January 27
The U.S. is to round up the week with preliminary data on the country’s fourth quarter GDP and GDP price index, followed by a revised data from the University of Michigan on consumer sentiment and inflation expectations.