VBCE Daily Foreign Exchange Update for Friday, Oct. 21, 2016

VBCE Daily Foreign Exchange Update for Friday, Oct. 21, 2016

USDCAD spot rate: 1.3330 - 1.3335 (as at 7:56am PST)

Technical Support / Resistance:

Key Economic Data Releases:

- Canada retail sales: -0.1% (exp. 0.3% / prev. -0.2%) core: 0% (exp. 0.3% / prev. -0.2%)

- Canada consumer price index m: 0.1% (exp. 0.2% / prev. -0.2) y: 1.3% (exp. 1.5% / prev. 1.1%)

- U.S. CPI Core m/m: 0.2% (exp. 0.2% / prev. 0%) y/y: 1.8% (exp. 1.8% / prev. 1.8%)

Key Event Calendar:

Date Canada U.S.A.

Oct. 24

Oct. 25

Oct. 26

Oct. 27

Oct. 28

Wholesale sales Manufacturing PMI

Housing price index, consumer confidence

Services PMI, oil inventories, new home sales

Durable goods, pending home sales

GDP Q3, GDP price index, consumer sentiment

Yesterday, USDCAD climbed from 1.3110 up to 1.3214 before falling back to 1.3170. From there it was a

steady climb to 1.3230 in late North American trade. The CAD has been the worst performing currency

since reaching multi-week highs vs. most currencies after Wednesday's Bank of Canada statement and oil

inventory data. (USDCAD tested 1.3010) The weakness stems from dovish comments from the Bank of

Canada Governor Poloz. USDCAD tested 1.3260 overnight before falling back to 1.3228 ahead of this

morning's data releases. Retail sales missed estimates while inflation data improved from last month. Core

data (used by the Bank of Canada for setting monetary policy) was as expected while headline data missed

slightly. This was enough to send USDCAD up to 1.3350. The previous highs of 1.3314 and 1.3307 were

effectively taken out opening the door for further upside from a technical standpoint. The pairing has since

fallen back to 1.3305 followed by a 2nd run which stalled at 1.3340. We are now near 1.3320. Currently, the

TSX is up 0.32% while the DJIA is down 0.52%. EURCAD is up 0.30% trading between 1.4396 and

1.4516. GBPCAD is up 0.40% trading between 1.6105 and 1.6287. JPYCAD is up 1.1% trading between

0.01270 and 0.01288. Gold is down 0.10% trading between $1,261 and $1,268USD/oz., silver is down

0.25% trading between $17.41 and $17.55USD/oz., while oil is up 0.30% trading between $50.25 and $51.

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

CNBC, Forexlive, CME Group


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