Investing.com – Last week saw the U.S. dollar retreat from a 5-day high to close down against its Canadian counterpart amid uncertainty over the scope and potential impact of fresh monetary easing by the Federal Reserve.
USD/CAD hit 1.0338 on Wednesday, the pair's highest since October 20; the pair subsequently consolidated at 1.0192 by close of trade on Friday, shedding 0.56% over the week.
The pair is likely to find support at 1.0116, the low of October 18, and resistance at 1.0338, the high of October 27.
The dollar’s gains came after the Wall Street Journal reported on Tuesday that the Fed was likely to unveil a program of U.S. Treasury bond purchases worth a few hundred billion dollars over several months, contrary to market expectations of purchases in excess of USD 1 trillion.
Meanwhile, official data released Friday seemed to underline expectations that the Federal Reserve will intervene to support the U.S. economic recovery.
U.S. GDP rose at an annual rate of 2.0% in the third quarter, in line with expectations, after rising 1.7% in the second quarter. However the real final sales component - the measure of demand in the U.S. - rose by only 0.6%. That was down from 0.9% in the second quarter and 1.1% in the first quarter.
Also Friday, official data showed that Canada’s GDP rose in line with expectations in August, rising by 0.3%, after falling by 0.1% in July.
Next week’s economic calendar contains events capable of shaping currency markets for several weeks to come, with the Fed's November 2-3 FOMC meeting and U.S. nonfarm payrolls. In addition, the U.S. is to release key weekly data on initial jobless claims as well as data on pending home sales and reports on manufacturing and service sector growth.
Meanwhile, Canada is to release key data on employment change and the country's unemployment rate.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect USD/CAD. The guide skips Tuesday as there are no relevant events on this day.
Monday, November 1
The U.S. will begin the week by publishing official data on personal income as well as data on personal spending, which accounts for the majority of overall economic activity. The country is also to publish industry data on manufacturing, a leading indicator of economic health.
Wednesday, November 3
The U.S. is to publish a key monthly report on ADP non-farm employment change, which leads government data by two days. The country is also set to publish industry data on service sector growth, as well as a report on crude oil inventories. The report on crude oil inventories can be a big market mover for the loonie, as Canada is the largest foreign supplier of crude oil to the U.S.
In addition, the Federal Reserve is to announce its benchmark interest rate. The announcement will be followed by the heavily anticipated FOMC rate statement.
Thursday, November 4
The U.S. is to publish key weekly data on initial jobless claims, the nation’s earliest economic data and a leading indicator of overall economic health. The country is also to publish quarterly data on non-farm productivity and labor costs, both leading inflationary indicators.
Meanwhile, Canada is to publish its Ivey PMI, a leading indicator of economic health.
Friday, November 5
The U.S. is to round up the week with data on non-farm employment change and a report on the country's unemployment rate. The country will also release official data on pending home sales, while Federal Reserve Chairman Ben Bernanke is due to deliver a speech at a public engagement. His comments will be closely scrutinized for any clues to the future direction of monetary policy.
Also Friday, Canada is set to release key data on employment change and the country's unemployment rate, as well as data on building permits, a leading indicator of future construction activity.
USD/CAD hit 1.0338 on Wednesday, the pair's highest since October 20; the pair subsequently consolidated at 1.0192 by close of trade on Friday, shedding 0.56% over the week.
The pair is likely to find support at 1.0116, the low of October 18, and resistance at 1.0338, the high of October 27.
The dollar’s gains came after the Wall Street Journal reported on Tuesday that the Fed was likely to unveil a program of U.S. Treasury bond purchases worth a few hundred billion dollars over several months, contrary to market expectations of purchases in excess of USD 1 trillion.
Meanwhile, official data released Friday seemed to underline expectations that the Federal Reserve will intervene to support the U.S. economic recovery.
U.S. GDP rose at an annual rate of 2.0% in the third quarter, in line with expectations, after rising 1.7% in the second quarter. However the real final sales component - the measure of demand in the U.S. - rose by only 0.6%. That was down from 0.9% in the second quarter and 1.1% in the first quarter.
Also Friday, official data showed that Canada’s GDP rose in line with expectations in August, rising by 0.3%, after falling by 0.1% in July.
Next week’s economic calendar contains events capable of shaping currency markets for several weeks to come, with the Fed's November 2-3 FOMC meeting and U.S. nonfarm payrolls. In addition, the U.S. is to release key weekly data on initial jobless claims as well as data on pending home sales and reports on manufacturing and service sector growth.
Meanwhile, Canada is to release key data on employment change and the country's unemployment rate.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect USD/CAD. The guide skips Tuesday as there are no relevant events on this day.
Monday, November 1
The U.S. will begin the week by publishing official data on personal income as well as data on personal spending, which accounts for the majority of overall economic activity. The country is also to publish industry data on manufacturing, a leading indicator of economic health.
Wednesday, November 3
The U.S. is to publish a key monthly report on ADP non-farm employment change, which leads government data by two days. The country is also set to publish industry data on service sector growth, as well as a report on crude oil inventories. The report on crude oil inventories can be a big market mover for the loonie, as Canada is the largest foreign supplier of crude oil to the U.S.
In addition, the Federal Reserve is to announce its benchmark interest rate. The announcement will be followed by the heavily anticipated FOMC rate statement.
Thursday, November 4
The U.S. is to publish key weekly data on initial jobless claims, the nation’s earliest economic data and a leading indicator of overall economic health. The country is also to publish quarterly data on non-farm productivity and labor costs, both leading inflationary indicators.
Meanwhile, Canada is to publish its Ivey PMI, a leading indicator of economic health.
Friday, November 5
The U.S. is to round up the week with data on non-farm employment change and a report on the country's unemployment rate. The country will also release official data on pending home sales, while Federal Reserve Chairman Ben Bernanke is due to deliver a speech at a public engagement. His comments will be closely scrutinized for any clues to the future direction of monetary policy.
Also Friday, Canada is set to release key data on employment change and the country's unemployment rate, as well as data on building permits, a leading indicator of future construction activity.