USDCAD spot rate: 1.2535 - 1.2540 (as at 7:57am PST)
Technical Support / Resistance:
Key Economic Data Releases:
- Canada GDP (June): 0.3% (exp 0.1% / prev 0.6%)
- Canada GDP (Q2 annualized): 4.5% (exp 3.5% / prev 3.7%)
- U.S. PCE price index y/y:1.4% (exp 1.4% / prev 1.5%)
- U.S. personal income: 0.4% (exp 0.3% / prev 0%) spending: 0.3% (exp 0.4% / prev 0.2%)
- U.S. Chicago PMI: 58.9 (exp 58.5 / prev 58.9)
- U.S. pending home sales: -0.8% (exp 0.5% / prev 1.3%)
Key Event Calendar:
Date Canada U.S.A.
Sept 1 RBC manufacturing PMI Non-farm payrolls, unemployment rate, avg. hourly earnings, ISM manufacturing, consumer sentiment
Yesterday, the CAD was the worst performing currency for the 2nd consecutive day. U.S. 2nd quarter GDP and ADP employment data both beat expectations. Oil prices declined below $46 towards 6 week lows despite a 9th consecutive week of crude oil inventory draws. USDCAD climbed from 1.2500 up to 1.2636 – the highest level in nearly two weeks after having failed to break below the 1.2442 level on two occasions this week. Overnight, broad-based USD strength continued sending USDCAD up to 1.2663 before falling back to 1.2620 during the London session. The pairing re-tested the 1.2663 level in early North American trade this morning before plunging to 1.2590 in seconds after the 5:30am release of the Canadian GDP data. It was the best quarter of growth in 6 years and gives the Bank of Canada a reason to raise interest rates next week (BOC announcement is 7:00am Wednesday Sept. 6th) USDCAD has since fallen to 1.2523 – almost completely reversing yesterday's USD gains. The pairing has corrected up to the 1.2555 level and has since eased back down to 1.2530. The CAD is the best preforming currency today and is also getting support from a 3% jump in oil prices as gasoline prices have climbed 11% this week to trade near 2 year highs. As month-end flows prevail, the USD appears to be giving up gains made earlier today vs the EUR, JPY, and AUD. The GBP is the worst performing currency having lost nearly 2.5 cents vs the CAD. Currently, the TSX and the DJIA are up 0.30% and 0.11% respectively. EURCAD is down 1% trading between 1.4850 and 1.5052. GBPCAD is down 1% trading between 1.6116 and 1.6355. JPYCAD is down 1% trading between 0.01135 and 0.01145. Gold is up 0.53% trading between $1,305 and $1,317 USD/oz.,silver is up 0.47% trading between $17.27 and $17.54 USD/oz., while oil is up 3% trading between $45.78 and $47.22.
Sources: Reuters, Bloomberg, FXStreet, RBC Capital Markets, Bank of Canada, U.S. Federal Reserve,CNBC, Forexlive, CME Group