VBCE Daily Foreign Exchange Update May 26, 2016

USDCAD spot rate: 1.2952 - 1.2957 (as at 7:40am PST)

Technical Support / Resistance:

Asia: 1.2975 to 1.3040

Europe: 1.2939 to 1.2991

North America: 1.2911 to 1.2980

Key Economic Data Releases:

S2 S1 R1 R2

1.2820 1.2911 1.3053 1.3110

- U.S. durable goods orders: 3.4% (exp. 0.5%) Core: 0.4% (exp. 0.3%)

- U.S. initial jobless claims: 268,000 (exp. 275,000)

- U.S. pending home sales: 5.1% (exp. 0.6%)

Key Event Calendar:

Date Canada U.S.A.

May 27 GDP Q1, consumer sentiment index

Yesterday, USDCAD dropped from 1.3130 down to 1.3087 before bouncing back to 1.3133 ahead of the

Bank of Canada interest rate decision / monetary policy statement. The statement was largely neutral

sending USDCAD down to 1.3053 as the market had been expecting a more dovish tone. Oil inventory data

saw oil prices rise to session highs before falling to session lows causing USDCAD to bounce back to

1.3110. The move was short-lived as oil rallied back to new session highs and USDCAD eased lower

towards 1.3015 in late North American trade. The trend continued overnight with Brent crude breaking the

$50 level sending USDCAD down to 1.2975. WTI crude oil prices broke above $50 this morning (7 month

highs) sending USDCAD down to 1.2911, a 1 week low despite stronger than expected U.S. durable goods

data. North American markets have given up early gains while oil prices failed to sustain gains above $50

and have fallen to session lows. USDCAD has bounced back towards European session highs near 1.2990.

The Canadian dollar and the Japanese yen are the best performing currencies while the Australian dollar

fell to an 8 month low vs. the CAD overnight. Tomorrow, U.S. GDP (Q1) is expected to be revised higher

from 0.5% to 0.9%. Currently, the TSX is up 0.21% while the DJIA is down 0.10%. EURCAD is down

0.20% trading between 1.4435 and 1.4554. GBPCAD is down 0.50% trading between 1.8989 and 1.9167.

JPYCAD is unchanged trading between 0.01175 and 0.01190. Gold is up 0.25% trading between $1,221

and $1,234USD/oz., silver is up 1.16% trading between $16.24 and $16.56USD/oz., while oil is up 0.44%

trading between $49.36 and $50.18.

Sources: Reuters, Bloomberg, FXStreet, RBC Capital Markets, Bank of Canada, U.S. Federal Reserve,

CNBC, Forexlive

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