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Forex - USD/CAD weekly outlook: March 10 - 14

Published 03/09/2014, 08:39 AM
Updated 03/09/2014, 08:39 AM
U.S. dollar jumps higher against Canadian dollar - The U.S. dollar jumped higher against the Canadian dollar on Friday after the U.S. jobs report for February came in ahead of expectations while Canada’s jobs report was unexpectedly weak.

USD/CAD hit highs of 1.1101 and ended Friday’s session at 1.1085, 0.96% higher for the day.

The pair was likely to find support at 1.0978, Friday’s low and resistance at 1.1135.

The U.S. economy added 175,000 jobs in February, the Labor Department reported, well above expectations for 149,000 new jobs. The unemployment rate ticked up to 6.7% from 6.6% in January, as more people joined the workforce.

The jobs report eased concerns over soft U.S. employment and other economic data seen in the past few months. The strong figure indicated that the Federal Reserve is likely to continue to scale back its stimulus program, which has weighed on the value of the dollar.

The Canadian dollar weakened after official data showed that the economy unexpectedly eliminated jobs last month.

Statistics Canada reported that the economy shed 7,000 jobs last month, confounding expectations for jobs growth of 15,000. The unemployment rate remained unchanged at 7.0%.

The data came after the Bank of Canada left rates on hold at 1.00% on Wednesday and reiterated that the next move in rates would be data dependent.

The bank said economic growth in the fourth quarter of 2013 was slightly stronger than anticipated, adding that it still expects growth of 2.5% in 2014.

In the week ahead, U.S. data on retail sales and consumer sentiment will 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, March 10

Canada is to release data on building starts.

Thursday, March 13

Canada is to release data on new house price inflation.

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

Friday, March 14

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

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