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Canadian Dollar Ticks Higher, Key Job Reports Loom

Published 03/09/2018, 08:17 AM
Updated 03/05/2019, 07:15 AM

USD/CAD is showing slight losses in the Friday session. In the North American session, USD/CAD is trading at 1.2878, down 0.15% on the day. On Friday, employment data will be in focus on both sides of the border. Canada releases employment change, and the US publishes wage growth and nonfarm payrolls.

Is President Trump baiting his trading partners into an all-out global trade war? After declaring that trade wars are a “good thing”, Trump made good on his tariff threat on Thursday, and signed an order imposing 25% tariffs on steel imports. Canada is the largest exporter of steel to the US, accounting for some 16% of US steel imports. The move could have severely impacted on the Canadian steel industry, but Trump has exempted Canada and Mexico from the tariffs, at least temporarily, drawing a huge sigh of relief from Ottawa. Still fears of an all-out global trade war remain a serious concern for Canada and the resignation of Gary Cohn, a senior economist in the White House who opposed the tariffs, will only dampen investor risk appetite.

The Federal Reserve is widely expected to raise rate four times in 2018, but the Bank of Canada will likely be unable to compete with that kind of pace. The BoC is concerned with economic growth, which slowed in the fourth quarter, as well as uncertainty over NAFTA, which could fall apart if the Trump administration makes good on its threat to withdraw if its demands for more favorable treatment for US goods is not met. The Bank is not expected to raise rates before May, and if the Fed outpaces the BoC on the rate front, the Canadian dollar could lose ground to a more attractive US currency.

USD/CAD Fundamentals

Thursday (March 8)

Friday (March 9)

*All release times are GMT

*Key events are in bold

USD/CAD for Friday, March 9, 2018

USD/CAD

USD/CAD, March 9 at 8:00 EST

Open: 1.2897 High: 1.2909 Low: 1.2866 Close: 1.2878

USD/CAD Technicals

S3 S2 S1 R1 R2 R3
1.2630 1.2757 1.2865 1.2920 1.3014 1.3165

USD/CAD showed little movement in the Asian session and has edged lower in European trade

  • 1.2865 is under pressure in support
  • 1.2920 is the next resistance line
  • Current range: 1.2865 to 1.2920

Further levels in both directions:

  • Below: 1.2865, 1.2757 and 1.2630
  • Above: 1.2920, 1.3014, 1.3165 and 1.3270

OANDA’s Open Positions Ratio

USD/CAD ratio continues to show little movement this week. Currently, short positions have a majority (59%), indicative of trader bias towards USD/CAD reversing directions and moving lower.

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