Investing.com - The U.S. dollar rose against its Canadian counterpart on Friday, paring some of the week’s losses as market sentiment weakened amid renewed concerns over the debt crisis in the euro zone.
USD/CAD hit 0.9841 on Thursday, the pair’s lowest since September 19; the pair subsequently consolidated at 0.9889 by close of trade on Friday, declining 0.95% over the week.
The pair is likely to find support at 0.9841, Thursday’s low and resistance at 0.9941, the high of February 20.
The safe-haven greenback found support on Friday after official data showed that German retail sales fell unexpectedly in January, sparking fresh concerns over the outlook for the euro zone’s largest economy.
Investors were also wary as Spain’s government raised its budget deficit target to 5.8% of gross domestic product for 2012, compared to a previous target of 4.4%.
Meanwhile, the loonie came under pressure as light sweet crude futures for delivery in April settled at USD106.58 a barrel by close of trade on Friday on the New York Mercantile Exchange, falling 2.73% over the week.
Raw materials, including oil account for about half of Canada’s export revenue.
The U.S. dollar tumbled over 1% against the loonie on Wednesday after the European Central Bank allotted EUR529.5 billion in loans to 800 lenders in its second long-term refinancing operation, stimulating demand for higher yielding assets.
But the greenback trimmed losses as Federal Reserve Chairman Ben Bernanke dampened expectations for a third round of monetary easing in testimony to Congress on Wednesday, after he acknowledged the recent improvement in the labor market and said that higher oil prices could push up inflation.
The remarks came after the U.S. Commerce Department reported that gross domestic product increased at a seasonally adjusted annual rate of 3.0% during the fourth quarter, up from a preliminary estimate of 2.8%.
Other reports painted a mixed picture of the U.S. economic recovery. Data on Tuesday showed that U.S. durable goods orders dropped to a three-year low in January.
The Institute for Supply Management said Thursday that U.S. manufacturing activity expanded at a slower rate than expected in February, while official data showed that U.S. initial jobless claims declined modestly in the previous week, holding close to the lowest level since March 2008.
In Canada, official data showed that the country’s current account declined more-than-expected in the fourth quarter, while raw material prices rose less-than-expected in January.
In the week ahead, investors will be looking ahead to Friday’s data on U.S. non-farm payrolls, to gauge the strength of the country’s economic recovery. Market participants will also be continuing to watch developments in Europe, ahead of interest rate announcements by the ECB on Thursday.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, March 5
The U.S. is to produce government data on factory orders, while the Institute of Supply Management is to release a report on service sector growth.
Tuesday, March 6
Canada is to publish a report on manufacturing activity, a leading indicator of economic strength.
Wednesday, March 7
The U.S. is to publish a report on ADP non-farm payrolls, which leads government data by two days. The country is also to release revised data on non-farm productivity and labor costs, which are important inflationary indicators, as well as a report on crude oil stockpiles.
Canada is to release official data on building permits, an excellent gauge of future construction activity.
Thursday, March 8
The U.S. is to produce government data on initial jobless claims, a leading indicator of economic health.
Meanwhile, the Bank of Canada is to announce its benchmark interest rate; the bank’s rate statement will provide investors with important insights into current economic conditions from the bank’s perspective.
Canada is also to publish official data on house price inflation and an industry report on housing starts.
Friday, March 9
Canada is to release official data on the change in the number of people employed, as well as data on the overall unemployment rate, a leading indicator of economic health. In addition Canada is to publish reports on the trade balance and labor productivity, an important inflationary indicator.
The U.S. is to round up the week with government data on non-farm payrolls and the unemployment rate, leading indicators of economic health, in addition to data on the trade balance and average hourly earnings.
USD/CAD hit 0.9841 on Thursday, the pair’s lowest since September 19; the pair subsequently consolidated at 0.9889 by close of trade on Friday, declining 0.95% over the week.
The pair is likely to find support at 0.9841, Thursday’s low and resistance at 0.9941, the high of February 20.
The safe-haven greenback found support on Friday after official data showed that German retail sales fell unexpectedly in January, sparking fresh concerns over the outlook for the euro zone’s largest economy.
Investors were also wary as Spain’s government raised its budget deficit target to 5.8% of gross domestic product for 2012, compared to a previous target of 4.4%.
Meanwhile, the loonie came under pressure as light sweet crude futures for delivery in April settled at USD106.58 a barrel by close of trade on Friday on the New York Mercantile Exchange, falling 2.73% over the week.
Raw materials, including oil account for about half of Canada’s export revenue.
The U.S. dollar tumbled over 1% against the loonie on Wednesday after the European Central Bank allotted EUR529.5 billion in loans to 800 lenders in its second long-term refinancing operation, stimulating demand for higher yielding assets.
But the greenback trimmed losses as Federal Reserve Chairman Ben Bernanke dampened expectations for a third round of monetary easing in testimony to Congress on Wednesday, after he acknowledged the recent improvement in the labor market and said that higher oil prices could push up inflation.
The remarks came after the U.S. Commerce Department reported that gross domestic product increased at a seasonally adjusted annual rate of 3.0% during the fourth quarter, up from a preliminary estimate of 2.8%.
Other reports painted a mixed picture of the U.S. economic recovery. Data on Tuesday showed that U.S. durable goods orders dropped to a three-year low in January.
The Institute for Supply Management said Thursday that U.S. manufacturing activity expanded at a slower rate than expected in February, while official data showed that U.S. initial jobless claims declined modestly in the previous week, holding close to the lowest level since March 2008.
In Canada, official data showed that the country’s current account declined more-than-expected in the fourth quarter, while raw material prices rose less-than-expected in January.
In the week ahead, investors will be looking ahead to Friday’s data on U.S. non-farm payrolls, to gauge the strength of the country’s economic recovery. Market participants will also be continuing to watch developments in Europe, ahead of interest rate announcements by the ECB on Thursday.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, March 5
The U.S. is to produce government data on factory orders, while the Institute of Supply Management is to release a report on service sector growth.
Tuesday, March 6
Canada is to publish a report on manufacturing activity, a leading indicator of economic strength.
Wednesday, March 7
The U.S. is to publish a report on ADP non-farm payrolls, which leads government data by two days. The country is also to release revised data on non-farm productivity and labor costs, which are important inflationary indicators, as well as a report on crude oil stockpiles.
Canada is to release official data on building permits, an excellent gauge of future construction activity.
Thursday, March 8
The U.S. is to produce government data on initial jobless claims, a leading indicator of economic health.
Meanwhile, the Bank of Canada is to announce its benchmark interest rate; the bank’s rate statement will provide investors with important insights into current economic conditions from the bank’s perspective.
Canada is also to publish official data on house price inflation and an industry report on housing starts.
Friday, March 9
Canada is to release official data on the change in the number of people employed, as well as data on the overall unemployment rate, a leading indicator of economic health. In addition Canada is to publish reports on the trade balance and labor productivity, an important inflationary indicator.
The U.S. is to round up the week with government data on non-farm payrolls and the unemployment rate, leading indicators of economic health, in addition to data on the trade balance and average hourly earnings.