The Canadian dollar continues to improve against its US counterpart. Early in Monday’s North American session, USD/CAD is trading in the mid-1.03 range. The Canadian dollar received a boost from an excellent Building Permits release on Monday, which posted a superb 20.7% gain, its best performance in over two years. This crushed the estimate of 4.4%. Today’s only US event is a minor release, Consumer Credit. On Friday, US Non-Farm Payrolls was a major disappointment, missing the estimate for the second straight week. Canadian Employment Change sparkled, and the loonie responded by gaining close to one cent.
The US ended last week on a disappointing note, as the all-important Non-Farm Payrolls came in at 169 thousand, missing the estimate of 178 thousand. The Unemployment Rate dropped from 7.4% to 7.3%, but this improvement is not all that significant, given the low participation rate in the labor force. The Fed continues to keep its cards away from prying market eyes, but we’re unlikely to see QE tapering without stronger employment numbers. Chicago Fed President Charles Evans hinted that we could see some action on this front from the Fed before the end of the year.
In Canada, it was a different story, as Employment Change recovered from an abysmal July release of -39.4 thousand, posting an excellent gain of 59.2 thousand in August. This crushed the estimate of 212.2 thousand. The Unemployment Rate dipped to 7.1% from 7.2% the month before. Ivey PMI climbed from 48.4 points in July to 51.0 points, but this was well off the estimate of 52.6 points. The Canadian dollar has enjoyed a strong September, posting gains of close to two cents at the expense of the US dollar.
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USD/CAD September 9 at 14:00 GMT
USD/CAD 1.0377 H: 1.0414 L: 1.0364
- USD/CAD continues to lose ground in Monday trading. The pair dropped below the 1.04 late in the Asian session and continues to edge lower.
- The pair is receiving support at 1.0337. This weak line could be tested if the Canadian dollar continues to improve. This is followed by a strong support line at 1.0282.
- USD/CAD is facing resistance at 1.0442. This is followed by a resistance line at 1.0502.
- Current range: 1.0337 to 1.0442
- Below: 1.0442, 1.0337, 1.0282, 1.0224 and 1.0158
- Above 1.0502, 1.0573, 1.0652, 1.0758 and 1.0888
USD/CAD ratio continues to be made up of a solid majority of short positions, indicating a strong trader bias towards the Canadian dollar continuing to posting gains against the US currency.
The Canadian dollar continues to flex its muscles as we begin the new trading week. With no major US releases on Monday, it could be a quiet North American session for USD/CAD.
USD/CAD Fundamentals
- 12:30 Canadian Building Permits. Estimate 4.4%. Actual 20.7%.
- 14:00 US Consumer Credit Estimate. 12.7B.