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Forex - USD/CAD weekly outlook: July 28 - August 1

Published 07/27/2014, 09:20 AM
Updated 07/27/2014, 09:20 AM
US dollar climbs to 1-month highs against Canadian dollar

US dollar climbs to 1-month highs against Canadian dollar

Investing.com - The U.S. dollar rose to more than one-month highs against the Canadian dollar on Friday, bolstered by stronger than expected data on durable goods orders.

USD/CAD advanced 0.64% to 1.0811 late Friday, the highest since June 20. For the week, the pair gained 0.68%.

The pair was likely to find support at 1.0737, Friday’s low and resistance at the 1.0850 level.

The greenback was boosted as better than expected data on durable goods orders for June added to signs that the U.S. economy is improving.

The Commerce Department reported a rise of 0.7% in orders of long lasting goods such as machinery and electronic products, compared to forecasts of 0.5%. Durable goods orders fell by 1.0% in May.

Demand for the dollar has been underpinned since Federal Reserve Chair Janet Yellen indicated earlier this month that U.S. interest rates could rise sooner if the recovery in the labor market continues.

Investor demand for safe haven assets was also boosted by geopolitical concerns as tensions between the West and Russia remained high. The European Union imposed a fresh round of sanctions against Russia on Friday, in protest over Russia’s involvement in the crisis in east Ukraine.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.25% to 81.15 late Friday.

In the week ahead investors will be focusing on U.S. data on second-quarter gross domestic product and an interest rate decision by the Federal Reserve on Wednesday, while Friday’s nonfarm payrolls report for July will also be closely watched.

Canada is to release the May report on gross domestic product on Thursday.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.

Monday, July 28

The U.S. is to release data on pending home sales.

Tuesday, July 29

The U.S. is to publish reports on house price inflation and consumer confidence.

Wednesday, July 30

The U.S. is to release the ADP report on private sector job creation, which leads the government’s nonfarm payrolls report by two days. The U.S. is also to publish revised data on second quarter growth.

Canada is to release a report on raw material price inflation.

Later Wednesday, the Federal Reserve is to announce its federal funds rate and publish its rate statement.

Thursday, July 31

Canada is to publish its monthly report on gross domestic product.

The U.S. is to release the weekly report on initial jobless claims, as well as data on manufacturing activity in the Chicago area.

Friday, August 1

The U.S. is to round up the week with what will be closely watched government data on nonfarm payrolls and the unemployment rate, while the Institute of Supply Management is to release data on manufacturing activity.

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