Investing.com - The U.S. dollar advanced against its Canadian counterpart on Friday, as ongoing uncertainty over Spain’s’ position on requesting a formal bailout and concerns over the outlook for the global economy weighed on demand for higher-yielding assets.
USD/CAD hit 0.9833 on Thursday, the pair’s highest since October 4; the pair subsequently consolidated at 0.9798 by close of trade Friday, gaining 0.27% over the week.
The pair is likely to find support at 0.9743, the low from October 9 and resistance at 0.9833, Thursday’s high.
Market sentiment was dominated by speculation over whether Spain was moving closer to requesting fiscal aid from its euro zone partners following a downgrade by ratings agency Standard & Poor’s.
S&P cut the country’s credit rating by two notches to BBB-minus with a negative outlook late Wednesday, just one notch above junk status, citing “mounting risks to Spain’s public finances.”
Market participants have been anticipating for the past month that the Spanish government would ask for a full-scale sovereign bailout.
A bailout would allow the European Central Bank to step in and buy Spanish sovereign debt, which would result in reduced borrowing costs for the debt-strapped nation.
But Spain has been reluctant to do so because it may come with conditions on its budget.
Meanwhile, the International Monetary Fund cut its 2012 and 2013 global growth forecasts earlier in the week to the weakest since the 2009 recession.
The IMF warned of even slower expansion unless officials in the U.S. and Europe address threats to their economies.
The greenback found additional support after data on Friday showed that U.S. consumer sentiment rose to its highest level in five years in October, while a separate report showed that producer price inflation rose more-than-forecast in September.
The University of Michigan said that its consumer sentiment index rose to a seasonally adjusted 83.1 from 78.3 in September, the highest level since September 2007.
The data came one day after the U.S. Department of Labor said the number of individuals filing for initial jobless benefits fell by 30,000 to a seasonally adjusted 339,000 in the previous week, compared to expectations for an increase of 1,000.
In the week ahead, markets will continue to continue to focus on whether Spain will formally request a bailout and if international creditors will extend loans to Greece as the country struggles to meet deficit reduction targets.
Meanwhile, the U.S. is to release a flurry of data, including reports on retail sales, manufacturing activity in New York and Philadelphia, initial jobless claims and housing starts, among others.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, October 15
The Bank of Canada is to publish its business outlook survey, a leading indicator of economic health.
Meanwhile, the U.S. is to produce official data on retail sales, the primary indicator of consumer spending, which accounts for the majority of economic activity.
In addition, the U.S. is to release data on manufacturing activity in New York state, as well as official data on business inventories.
Tuesday, October 16
Canada is to produce official data on manufacturing sales, a leading indicator of economic health. The country is also to produce official data on foreign securities purchases.
The U.S. is to release government data on consumer price inflation and industrial production. The U.S. is also to produce official data on treasury long-term purchases and the capacity utilization rate.
Wednesday, October 17
The U.S. is to publish government data on building permits, an excellent gauge of future construction activity, as well as data on housing starts, a leading indicator of economic health. The U.S. is also to produce official data on crude oil stockpiles.
Thursday, October 18
Canada is to release government data on wholesale sales, a leading indicator of consumer spending.
The U.S. is to publish weekly government data on initial jobless claims, as well as a report on manufacturing activity in Philadelphia, a leading indicator of economic strength.
Friday, October 19
Canada is to release official data on consumer price inflation, which accounts for the majority of overall inflation.
The U.S. is to round up the week with industry data on existing home sales, a leading indicator of economic health.
USD/CAD hit 0.9833 on Thursday, the pair’s highest since October 4; the pair subsequently consolidated at 0.9798 by close of trade Friday, gaining 0.27% over the week.
The pair is likely to find support at 0.9743, the low from October 9 and resistance at 0.9833, Thursday’s high.
Market sentiment was dominated by speculation over whether Spain was moving closer to requesting fiscal aid from its euro zone partners following a downgrade by ratings agency Standard & Poor’s.
S&P cut the country’s credit rating by two notches to BBB-minus with a negative outlook late Wednesday, just one notch above junk status, citing “mounting risks to Spain’s public finances.”
Market participants have been anticipating for the past month that the Spanish government would ask for a full-scale sovereign bailout.
A bailout would allow the European Central Bank to step in and buy Spanish sovereign debt, which would result in reduced borrowing costs for the debt-strapped nation.
But Spain has been reluctant to do so because it may come with conditions on its budget.
Meanwhile, the International Monetary Fund cut its 2012 and 2013 global growth forecasts earlier in the week to the weakest since the 2009 recession.
The IMF warned of even slower expansion unless officials in the U.S. and Europe address threats to their economies.
The greenback found additional support after data on Friday showed that U.S. consumer sentiment rose to its highest level in five years in October, while a separate report showed that producer price inflation rose more-than-forecast in September.
The University of Michigan said that its consumer sentiment index rose to a seasonally adjusted 83.1 from 78.3 in September, the highest level since September 2007.
The data came one day after the U.S. Department of Labor said the number of individuals filing for initial jobless benefits fell by 30,000 to a seasonally adjusted 339,000 in the previous week, compared to expectations for an increase of 1,000.
In the week ahead, markets will continue to continue to focus on whether Spain will formally request a bailout and if international creditors will extend loans to Greece as the country struggles to meet deficit reduction targets.
Meanwhile, the U.S. is to release a flurry of data, including reports on retail sales, manufacturing activity in New York and Philadelphia, initial jobless claims and housing starts, among others.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, October 15
The Bank of Canada is to publish its business outlook survey, a leading indicator of economic health.
Meanwhile, the U.S. is to produce official data on retail sales, the primary indicator of consumer spending, which accounts for the majority of economic activity.
In addition, the U.S. is to release data on manufacturing activity in New York state, as well as official data on business inventories.
Tuesday, October 16
Canada is to produce official data on manufacturing sales, a leading indicator of economic health. The country is also to produce official data on foreign securities purchases.
The U.S. is to release government data on consumer price inflation and industrial production. The U.S. is also to produce official data on treasury long-term purchases and the capacity utilization rate.
Wednesday, October 17
The U.S. is to publish government data on building permits, an excellent gauge of future construction activity, as well as data on housing starts, a leading indicator of economic health. The U.S. is also to produce official data on crude oil stockpiles.
Thursday, October 18
Canada is to release government data on wholesale sales, a leading indicator of consumer spending.
The U.S. is to publish weekly government data on initial jobless claims, as well as a report on manufacturing activity in Philadelphia, a leading indicator of economic strength.
Friday, October 19
Canada is to release official data on consumer price inflation, which accounts for the majority of overall inflation.
The U.S. is to round up the week with industry data on existing home sales, a leading indicator of economic health.