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Forex - USD/CAD weekly outlook: May 26 - 30

Published 05/25/2014, 08:07 AM
U.S. dollar lower against Canadian dollar on Friday after Canadian inflation data

Investing.com - The U.S. dollar ended Friday’s session lower against the Canadian dollar after data showing that Canadian inflation rose in line with expectations in April.

USD/CAD ended Friday’s session down 0.31% to 1.0860, the lowest level since May 19. For the week, the pair slipped 0.12%.

The pair is likely to find support at 1.0850 and resistance at 1.0929, Thursday’s high.

The Canadian dollar was boosted after Statistics Canada reported that the annual rate of inflation rose to the central bank’s target of 2% for the first time in in two years in April, up from 1.5% the previous month.

The annual core rate, which excludes volatile elements such as some food and energy prices, rose 1.4%, as expected.

Canadian consumer prices rose 0.3% in April from a month earlier, also in line with forecasts.

The data sparked expectations that the Bank of Canada could tone down its view on 'downside risks to inflation', possibly as soon as its next rate review in June.

In the U.S., upbeat new home sales data added to signs of a recovery in the housing market.

The Commerce Department said sales of new homes rose by a larger-than-expected 6.4% to 433,000 in April, after two months of decline. Analysts had been expecting a figure of 425,000. March's number was revised up from 384,000 to 407,000.

The week ahead will be shortened, with U.S. markets staying closed on Monday for the Memorial Day holiday. Revised data on U.S. first quarter growth and reports on U.S. consumer confidence will be in focus, while Canada is to publish its monthly report on economic growth on Thursday.

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

Monday, May 26

U.S. markets will remain closed for the Memorial Day holiday.

Tuesday, May 27

The U.S. is to produce data on durable goods orders, house price inflation and consumer confidence.

Thursday, May 29

The U.S. is to release revised data on first quarter GDP, as well as the weekly government report on initial jobless claims and data on pending home sales.

Friday, May 30

Canada is to publish the monthly report on GDP growth.

The U.S. is to round up the week with a report on personal income and expenditure and revised data from the University of Michigan on consumer sentiment.

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