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​VBCE Weekly Foreign Exchange Wrap Up for Nov. 21 – Nov. 25, 2016

Steve Brown, Senior Corporate Trader | Stevebrown@vbce.ca

The CAD continued to make broad gains for much of this week and was again the best performing currency at times helped by a 6% rally in oil prices. Ahead of the U.S. Thanksgiving holiday, EURCAD tested the 1.42 level – near a 1 year low and an 11 cent decline since the night of the U.S. election. The yen lost 11% vs. the CAD over the same time-span testing a 7 month low. Oil prices dropped sharply on Friday to a weekly low sending the CAD lower across the board and closing the week on a weaker tone. USDCAD was neutral this week holding a fairly tight 1.3382 – 1.3535 range. Again, a U.S. Fed interest rate hike on December 14th is fairly certain with probabilities holding this week near 93.5%.

Weekly Open



Weekly Close


























Themes for the week:

*EURCAD falls to 1 year low / EURUSD falls to 20 month low

*JPYCAD falls to 7 month low

*Oil gains initially gains 6% from $46.27 to $49.17 before falling ~ 7% to end the week near $45.91 as market positions itself for Nov. 30th OPEC Meeting

*Canadian retail sales: 0.6% (exp. 0.6% / prev. 0.1%) Core: 0% (exp. 0.5% / prev. 0.2%)

*U.S. durable goods orders: 4.8%(exp. 1.5%/prev. 0.4%)Core: 1%(exp. 0.2%/prev. 0.2%)

*U.S. FOMC minutes: "most participants expressed a view that it could well become appropriate to raise the target range for the federal-funds rate relatively soon"

*Atlanta Fed U.S. GDP Q4 unchanged at 3.6%

*U.S. Fed funds probability for Dec. rate hike now at 93.5%

On Tap for Next week:

Tuesday, Nov. 29: U.S. GDP Q3: exp. 3.0% / prev. 2.9%

Wednesday, Nov. 30: Canada GDP (Sept) exp. 0.1% / prev. 0.2%

Canada GDP Q3 annualized exp. 3.4% / prev. -1.6%

Friday, Dec. 2: Canada net employment change exp. -20,000 / prev. +43,900

Canada unemployment rate exp. 7% / prev. 7%

U.S. non-farm payrolls exp. 175,000 / prev. 161,000

U.S. unemployment rate exp. 4.9% / prev. 4.9%

U.S. average hourly earnings exp. 0.2% / prev. 0.4%

The CAD could see some volatile movement next week as there will likely be some large oil price swings surrounding the Dec. 30th OPEC meeting. Oil prices have rallied in recent weeks in anticipation of announced production cuts to stabilize oil prices in a higher range compared with the lower price levels seen in 2016. There is always the risk that an agreement could fall through and send oil prices lower. Both Canadian and U.S. 3rd quarter GDP are expected to improve over Q2 data while employment data should remain solid as well.

Topside targets to consider: 1.3535, 1.3565, 1.3588, 1.3610

Downside targets to consider: 1.3450, 1.3400, 1.3350, 1.3265

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


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The information and opinions contained herein are gathered from sources which are thought to be reliable but the reader should not assume that the information and opinions are official or final. VBCE makes no warranty concerning the accuracy of the information and opinions, and accepts no liability for the consequences of any actions taken on the basis of the information and opinions provided. The content is for general information only and does not constitute in anyway giving financial advice.