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Forex - USD/CAD weekly outlook: June 9 - 13

Published 06/08/2014, 08:00 AM
Updated 06/08/2014, 08:00 AM
Canadian dollar ends Friday slightly lower against U.S. dollar - The Canadian dollar ended the day slightly lower against the U.S. dollar on Friday as a lackluster domestic jobs report was offset by a report showing solid jobs growth in the U.S. last month.

USD/CAD touched session highs of 1.0948 in volatile trade, before settling at 1.0931 late Friday, 0.09% higher for the day.

The pair is likely to find support at 1.0890 and resistance at 1.0960, Thursday’s high and a one-month high.

Statistics Canada reported that the economy added 25,800 jobs in May, above expectations for 25,000, but gains were due to the creation of part-time positions.

Meanwhile, the Canadian unemployment rate ticked up to 7.0% from 6.9% in April.

At the same time, U.S. data showing that the economy added jobs for a fourth straight month in May bolstered optimism over the broader economic recovery.

The Department of Labor reported Friday that the U.S. economy added 217,000 jobs last month, just under expectations for jobs growth of 218,000, while April's figure was revised to 282,000.

The U.S. unemployment rate remained unchanged at a five-and-a-half year low of 6.3%.

Earlier in the week, the Canadian dollar weakened after the Bank of Canada said that slower than expected global growth meant that the risks associated with low inflation still remain, despite an increase in Canadian consumer prices in April.

The comments came after the BoC left its benchmark interest rate on hold at 1% on Wednesday.

In the week ahead, investors will be looking ahead to Thursday’s U.S. retail sales report for further indications on the strength of the recovery. A speech on Thursday by the head of the BoC will also be in focus.

Ahead of the coming week, has compiled a list of these and other significant events likely to affect the markets. The guide skips Tuesday and Wednesday as there are no relevant events on these days.

Monday, June 9

Canada is to publish data on housing starts.

Thursday, June 12

Canada is to publish data on new house price inflation, while BoC Governor Stephen Poloz is to speak at an event in Ottawa.

The U.S. is to release the weekly report on initial jobless claims, in addition to data on retail sales and import prices.

Friday, June 13

Canada is to publish data on manufacturing sales.

The U.S. is to round up the week with data on producer price inflation and preliminary data on consumer sentiment from the University of Michigan.

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