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USD/CAD – Canadian dollar steady as construction reports sparkle

The Canadian dollar has posted slight gains in Tuesday trading. Currently, USD/CAD is trading at 1.3128, up 0.15% on the day. On the release front, Canadian construction data beat expectations. Housing Starts jumped 248 thousand, crushing the estimate of 195 thousand. This marked the highest gain since November. Building Permits followed the same trend, climbing 4.7%, compared to the estimate of 0.1%. This was the strongest gain in four months. The U.S will release JOLTS Jobs Openings, which is expected to climb to 6.88 million.

All eyes are on the Bank of Canada, which holds its monthly rate meeting on Wednesday. The markets are expecting that Bank policymakers will raise rates by a quarter-point to 1.50%, a level not seen since December 2008. BoC Governor Stephen Poloz said that the July rate decision would be based on economic data, and Friday’s strong employment data will be added ammunition in favor of raising rates at the upcoming meeting. The economy created 31.8 thousand jobs in June, well above the estimate of 22.3 thousand. Wage growth also looked strong, as hourly earnings gained 3.5% in June on an annualized basis.

U.S employment data was a mix on Friday, as job growth remained above the 200-thousand level, but wage growth faltered. Nonfarm payrolls dropped to 213 thousand, but this beat the estimate of 195 thousand. Average Hourly Earnings edged lower to 0.2%, shy of the estimate of 0.3%. There was a surprise as the unemployment rate climbed to 4.0%, above the forecast of 3.8%. The data demonstrates that the U.S labor market remains strong, and the economy continues to perform well. The markets remain bullish on U.S growth, despite uncertainty in Europe and elsewhere, as well as the growing threat of an all-out trade war between the U.S and China.

  Commodities Weekly: Gold saved by dollar’s retracement

  All is quiet on the western trade war front

 

Tuesday (July 10)

  • 8:15 Canadian Housing Starts. Estimate 195K.  Actual 248K
  • 8:30 Canadian Building Permits. Estimate 0.1%. Actual 4.7%
  • 10:00 US JOLTS Job Openings. Estimate 6.88M

Wednesday (July 11)

  • 8:30 US Core PPI. Estimate 0.2%
  • 8:30 US PPI. Estimate 0.2%
  • 10:00 BoC Monetary Policy Report
  • 10:00 BoC Rate Statement
  • 10:00 BoC Overnight Rate. Estimate 1.50% 
  • 10:00 US Final Wholesale Inventories. Estimate 0.5%
  • 10:30 US Crude Oil Inventories
  • 11:15 BoC Press Conference
  • 12:30 US FOMC Member Rafael Bostic Speaks
  • 13:01 US 10-year Bond Auction
  • 16:30 US FOMC Member John Williams Speaks

*All release times are DST

*Key events are in bold

 

USD/CAD for Tuesday, July 10, 2018

USD/CAD, July 10 at 8:35 DST

Open: 1.3108 High: 1.3147 Low: 1.3101 Close: 1.3128

 

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.2831 1.2970 1.3067 1.3160 1.3292 1.3436

USD/CAD has posted small gains in the Asian and European sessions

  • 1.3067 is providing support
  • 1.3160 is a weak resistance line
  • Current range: 1.3067 to 1.3160

Further levels in both directions:

  • Below: 1.3067, 1.2970 and 1.2831
  • Above: 1.3160, 1.3292, 1.3436 and 1.3530

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