​VBCE Daily Foreign Exchange Update for Wednesday, July 20, 2016

USDCAD spot rate: 1.3040 - 1.3045 (as at 7:56am PST)

Technical Support / Resistance:

Key Economic Data Releases:

- EIA crude oil inventories: -2.342 million barrels (exp. -2.10 million / prev. -2.546 million)

Key Event Calendar:

Yesterday, USDCAD climbed from 1.2944 up to 1.3054 and managed to remain above 1.30 for the bulk of the North American session. The USD enjoyed broad gains as equity markets struggled to add to historical gains and oil prices dropped $1. Overnight, USDCAD broke above yesterday's high of 1.3054 and extended up to1.3096 this morning. Prime Minister Trudeau made headlines noting "real challenges" for the Canadian economy. Oil inventory data out at 7:30am confirmed another draw from inventories sending oil prices up nearly 3%. The quick surge in oil prices caused USDCAD to retrace its daily gains and fall to 1.3030. USDCAD continues to trade in a somewhat neutral bias. The pairing has been confined to a 3 cent range (1.2830 – 1.3137) over the past month. There is some event risk later this week that could see further CAD weakness on the horizon. On Friday, core CPI inflation data is expected to tick lower from 0.3% m/m to 0%. (2.1% y/y to 2.0%) Core retail sales are expected to decline from 1.3% to a reading of just 0.3%. Currently, the TSX is down 0.03% while the DJIA is up 0.25%. EURCAD is up 0.20% trading between 1.4331 and 1.4411. GBPCAD is up 1% trading between 1.7033 and 1.7246. JPYCAD is down 0.50% trading between 0.01223 and 0.01231. Gold is down 1.1% trading between $1,313 and $1,338USD/oz., silver is down 2.3% trading between $19.40 and $19.98USD/oz., while oil is up 1% trading between $44.58 and $45.81.

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