Investing.com - The U.S. dollar ended the week sharply higher against its Canadian counterpart on Friday, as concerns over the European banking sector and the debt crisis in the euro zone continued to dominate market sentiment.
USD/CAD hit 1.0284 on Friday, the pair’s highest since December 21; the pair subsequently consolidated at 1.0283 by close of trade on Friday, climbing 0.82% over the week.
The pair is likely to find support at 1.0120, the low of January 5 and resistance at 1.0347, the high of December 13.
The loonie came under pressure on Friday as concerns over the sovereign funding needs of troubled euro zone states, as well as signs of weakness in the region’s banking sector overshadowed better-than-expected U.S. jobs data.
The U.S. Department of Labor said nonfarm payrolls increased by 200,000 in December from a downwardly revised 100,000 the previous month and surpassing expectations for a 150,000 increase. The unemployment rate unexpectedly fell to 8.5%, the lowest level since February 2009.
Also Friday, official data showed that the rate of unemployment in Canada rose unexpectedly in December, ticking up to 7.5%, from 7.4% the previous month.
Analysts had expected Canada’s unemployment rate to remain unchanged at 7.4% in December.
The greenback found support earlier in the week after France sold EUR4.02 billion of 10-year bonds in an auction which met with solid demand but at higher yields.
France is seen as vulnerable to losing its triple-A credit rating in the coming weeks, after it was put on negative watch by ratings agencies Standard & Poor’s and Fitch’s in December, amid concerns over the handling of the financial crisis in the euro zone.
The French auction came one day after an auction of German 10-year government debt which encountered lower than average investor demand.
The U.S. dollar was also boosted as fears over the strength of the euro zone’s banking sector intensified after a report on Thursday showed that overnight deposits at the European Central Bank reached a new record high of EUR455 billion, indicating that European banks remain unwilling to lend to each other.
Meanwhile, a report showed that Canada’s Ivey purchasing managers’ index rose unexpectedly in December to 63.5 from a reading at 59.9 the previous month. Analysts had expected the index to decline to 59.1.
On the index, a figure above 50.0 indicates industry expansion, below indicates contraction.
In the week ahead, investors will be closely watching a meeting between French President Nicolas Sarkozy and German Chancellor Angela Merkel on Monday for any signs of progress in resolving the region’s two-year old debt crisis.
France, Greece, Germany, Italy and Spain are all scheduled to hold auctions of government debt, while the ECB is to hold its first policy-setting meeting of the New Year.
Also next week, the U.S. is to publish official data on retail sales and consumer sentiment.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, January 9
Canada is to produce official data on building permits, an excellent gauge of future construction activity. The Bank of Canada is also to release its quarterly business outlook survey, a leading indicator of economic health.
Also Monday, Federal Open Market Committee member Dennis Lockhart is to speak.
Tuesday, January 10
Canada is to release data on housing starts, an excellent indicator of economic health, while in the U.S., FOMC members John Williams and Sandra Pianalto are to speak.
Wednesday, January 11
The U.S. is to produce official data on crude oil stockpiles, while the Federal Reserve is to release its Beige Book. In addition, FOMC member Dennis Lockhart is to speak.
Thursday, January 12
Canada is to produce official data on new house price inflation, a leading indicator of demand in the housing sector.
Later Thursday, the U.S. is to release official data on retail sales and initial jobless claims. The country is also to publish government data on business inventories, a signal of future business spending, followed by a report on the federal budget balance.
Friday, January 13
Canada is to produce an official report on the trade balance.
The U.S. is to round up the week with data on the trade balance, as well as government data on import prices. In addition, the University of Michigan is to release preliminary data on inflation expectations and consumer sentiment, a leading indicator of consumer spending.
USD/CAD hit 1.0284 on Friday, the pair’s highest since December 21; the pair subsequently consolidated at 1.0283 by close of trade on Friday, climbing 0.82% over the week.
The pair is likely to find support at 1.0120, the low of January 5 and resistance at 1.0347, the high of December 13.
The loonie came under pressure on Friday as concerns over the sovereign funding needs of troubled euro zone states, as well as signs of weakness in the region’s banking sector overshadowed better-than-expected U.S. jobs data.
The U.S. Department of Labor said nonfarm payrolls increased by 200,000 in December from a downwardly revised 100,000 the previous month and surpassing expectations for a 150,000 increase. The unemployment rate unexpectedly fell to 8.5%, the lowest level since February 2009.
Also Friday, official data showed that the rate of unemployment in Canada rose unexpectedly in December, ticking up to 7.5%, from 7.4% the previous month.
Analysts had expected Canada’s unemployment rate to remain unchanged at 7.4% in December.
The greenback found support earlier in the week after France sold EUR4.02 billion of 10-year bonds in an auction which met with solid demand but at higher yields.
France is seen as vulnerable to losing its triple-A credit rating in the coming weeks, after it was put on negative watch by ratings agencies Standard & Poor’s and Fitch’s in December, amid concerns over the handling of the financial crisis in the euro zone.
The French auction came one day after an auction of German 10-year government debt which encountered lower than average investor demand.
The U.S. dollar was also boosted as fears over the strength of the euro zone’s banking sector intensified after a report on Thursday showed that overnight deposits at the European Central Bank reached a new record high of EUR455 billion, indicating that European banks remain unwilling to lend to each other.
Meanwhile, a report showed that Canada’s Ivey purchasing managers’ index rose unexpectedly in December to 63.5 from a reading at 59.9 the previous month. Analysts had expected the index to decline to 59.1.
On the index, a figure above 50.0 indicates industry expansion, below indicates contraction.
In the week ahead, investors will be closely watching a meeting between French President Nicolas Sarkozy and German Chancellor Angela Merkel on Monday for any signs of progress in resolving the region’s two-year old debt crisis.
France, Greece, Germany, Italy and Spain are all scheduled to hold auctions of government debt, while the ECB is to hold its first policy-setting meeting of the New Year.
Also next week, the U.S. is to publish official data on retail sales and consumer sentiment.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, January 9
Canada is to produce official data on building permits, an excellent gauge of future construction activity. The Bank of Canada is also to release its quarterly business outlook survey, a leading indicator of economic health.
Also Monday, Federal Open Market Committee member Dennis Lockhart is to speak.
Tuesday, January 10
Canada is to release data on housing starts, an excellent indicator of economic health, while in the U.S., FOMC members John Williams and Sandra Pianalto are to speak.
Wednesday, January 11
The U.S. is to produce official data on crude oil stockpiles, while the Federal Reserve is to release its Beige Book. In addition, FOMC member Dennis Lockhart is to speak.
Thursday, January 12
Canada is to produce official data on new house price inflation, a leading indicator of demand in the housing sector.
Later Thursday, the U.S. is to release official data on retail sales and initial jobless claims. The country is also to publish government data on business inventories, a signal of future business spending, followed by a report on the federal budget balance.
Friday, January 13
Canada is to produce an official report on the trade balance.
The U.S. is to round up the week with data on the trade balance, as well as government data on import prices. In addition, the University of Michigan is to release preliminary data on inflation expectations and consumer sentiment, a leading indicator of consumer spending.