Investing.com - Last week saw the U.S. dollar fall sharply against its Canadian counterpart as the unveiling of a new plan to deal with Greece's financial troubles and avoid debt contagion in the euro zone weighed on demand for the greenback.
USD/CAD hit 0.9890 on Thursday, the pair's lowest since September 20; the pair subsequently consolidated at 0.9914 by close of trade on Friday, tumbling 1.77% over the week.
The pair is likely to find support at 0.9805, the low of September 19 and resistance at 1.0099, the high of October 24.
The greenback dropped to a five-week low, as risk appetite recovered after European leaders hammered out an agreement with banks to take a 'voluntary' 50% loss on the face value of their Greek debt.
Leaders also agreed to expand the firepower of the euro zone's bailout fund, the European Financial Stability Facility, to EUR1 trillion.
Risk appetite was also boosted after preliminary data showed that gross domestic product in the U.S. rose more-than-expected in the third quarter, expanding at the fastest rate since the third quarter of 2010.
The reading nearly doubled growth of 1.3% recorded in the preceding quarter. Analysts had expected U.S. gross domestic product to rise 2.4% in the third quarter.
But the U.S. dollar found support on Friday, after ratings agency Fitch said that writedowns on Greek debt would indicate a default and after Italy’s borrowing costs rose to a euro lifetime high, following an auction of government debt.
Earlier in the week, the Canadian dollar climbed above parity against the greenback for the first time in over a month, but gains were limited after the Bank of Canada cut its outlook for growth.
On Wednesday, the BoC cut its 2011 fourth-quarter annualized growth forecast to 0.8% from its July forecast of 2.9% and revised down its estimate of the first quarter of next year to 1.9% from 2.9%.
The loonie also found support as crude oil posted its biggest weekly gain since February.
On the New York Mercantile Exchange, light sweet crude futures for delivery in December traded at USD93.55 a barrel by close of trade on Friday, rallying 6.75% over the week.
Raw materials, including oil account for about half of Canada’s export revenue.
In the week ahead, investors will be focusing on the Federal Reserve’s policy meeting on Wednesday and Friday’s U.S. nonfarm payrolls data. Elsewhere, Canada is to produce its monthly report on 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, October 31
Canada is to produce its monthly report on gross domestic product, the broadest measure of economic activity and the primary gauge of the economy's health. The country is also to publish official data on factory gate inflation and raw material inflation.
The U.S is to produce a report on manufacturing activity in the Chicago area, an important indicator of economic health.
Tuesday, November 1
The Institute of Supply Management is to produce a report on U.S. manufacturing activity, a leading indicator of economic health.
Wednesday, November 2
The U.S. is to release private sector data on non-farm payrolls that leads government data by two days as well as a government report on crude oil stockpiles. This data can be a big market mover for the loonie due to the size of Canada's energy sector.
In addition, the Federal Reserve is to announce its benchmark interest rate. The bank’s post-policy meeting press conference will be closely watched for indications to the future possible direction of monetary policy.
Thursday, November 3
Leaders from the G-20 group of industrialized nations are to hold talks to discuss a range of global economic topics, including the financial crisis in the euro zone, in Cannes.
The U.S. is to produce its weekly report on initial jobless claims as well as government data on factory orders. The U.S. is also to publish preliminary data on nonfarm productivity and labor costs, important inflationary indicators. In addition the ISM is to release a report on service sector activity, a leading indicator of economic health.
Friday, November 4
Canada is to produce official data on employment change and the unemployment rate, a leading indicator of economic strength. The country is also to produce government data on building permits and a report on manufacturing activity.
The U.S. is to round up the week with its closely watched government report on nonfarm payrolls, in addition to official data on the unemployment rate and average hourly earnings.
Meanwhile, G-20 leaders are to meet for a second day in Cannes.
USD/CAD hit 0.9890 on Thursday, the pair's lowest since September 20; the pair subsequently consolidated at 0.9914 by close of trade on Friday, tumbling 1.77% over the week.
The pair is likely to find support at 0.9805, the low of September 19 and resistance at 1.0099, the high of October 24.
The greenback dropped to a five-week low, as risk appetite recovered after European leaders hammered out an agreement with banks to take a 'voluntary' 50% loss on the face value of their Greek debt.
Leaders also agreed to expand the firepower of the euro zone's bailout fund, the European Financial Stability Facility, to EUR1 trillion.
Risk appetite was also boosted after preliminary data showed that gross domestic product in the U.S. rose more-than-expected in the third quarter, expanding at the fastest rate since the third quarter of 2010.
The reading nearly doubled growth of 1.3% recorded in the preceding quarter. Analysts had expected U.S. gross domestic product to rise 2.4% in the third quarter.
But the U.S. dollar found support on Friday, after ratings agency Fitch said that writedowns on Greek debt would indicate a default and after Italy’s borrowing costs rose to a euro lifetime high, following an auction of government debt.
Earlier in the week, the Canadian dollar climbed above parity against the greenback for the first time in over a month, but gains were limited after the Bank of Canada cut its outlook for growth.
On Wednesday, the BoC cut its 2011 fourth-quarter annualized growth forecast to 0.8% from its July forecast of 2.9% and revised down its estimate of the first quarter of next year to 1.9% from 2.9%.
The loonie also found support as crude oil posted its biggest weekly gain since February.
On the New York Mercantile Exchange, light sweet crude futures for delivery in December traded at USD93.55 a barrel by close of trade on Friday, rallying 6.75% over the week.
Raw materials, including oil account for about half of Canada’s export revenue.
In the week ahead, investors will be focusing on the Federal Reserve’s policy meeting on Wednesday and Friday’s U.S. nonfarm payrolls data. Elsewhere, Canada is to produce its monthly report on 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, October 31
Canada is to produce its monthly report on gross domestic product, the broadest measure of economic activity and the primary gauge of the economy's health. The country is also to publish official data on factory gate inflation and raw material inflation.
The U.S is to produce a report on manufacturing activity in the Chicago area, an important indicator of economic health.
Tuesday, November 1
The Institute of Supply Management is to produce a report on U.S. manufacturing activity, a leading indicator of economic health.
Wednesday, November 2
The U.S. is to release private sector data on non-farm payrolls that leads government data by two days as well as a government report on crude oil stockpiles. This data can be a big market mover for the loonie due to the size of Canada's energy sector.
In addition, the Federal Reserve is to announce its benchmark interest rate. The bank’s post-policy meeting press conference will be closely watched for indications to the future possible direction of monetary policy.
Thursday, November 3
Leaders from the G-20 group of industrialized nations are to hold talks to discuss a range of global economic topics, including the financial crisis in the euro zone, in Cannes.
The U.S. is to produce its weekly report on initial jobless claims as well as government data on factory orders. The U.S. is also to publish preliminary data on nonfarm productivity and labor costs, important inflationary indicators. In addition the ISM is to release a report on service sector activity, a leading indicator of economic health.
Friday, November 4
Canada is to produce official data on employment change and the unemployment rate, a leading indicator of economic strength. The country is also to produce government data on building permits and a report on manufacturing activity.
The U.S. is to round up the week with its closely watched government report on nonfarm payrolls, in addition to official data on the unemployment rate and average hourly earnings.
Meanwhile, G-20 leaders are to meet for a second day in Cannes.