USDCAD news

Canadian GDP 0.3% vs. 0.3% forecast

Canadian gross domestic product rose last month, official data showed on Friday.

In a report, Statistics Canada said that GDP rose to a seasonally adjusted 0.3%, from 0.5% in the preceding month whose figure was revised up from 0.4%.

Analysts had expected GDP to rise 0.3% last month.

USD/CAD forecast for the week of September 1, 2014

The USD/CAD pair initially tried to rally during the course of the week, but as you can see the 1.10 level offered way too much in the way of resistance. We ended up falling below the 1.0850 level at one point, but bounce significantly on Friday. Because of this, and the fact that there is an uptrend line below, we feel that you can only buy this pair at the moment. However, we need to break above the 1.10 level in order to feel comfortable doing so for a longer period of time.

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USD/CAD Forecast Sep. 1-5

USD/CAD dropped lower, as the loonie managed to recover despite the greenback’s strength. The highlights of this week are the rate decision by the BOC and the employment figures. Will Poloz and co. accept rising inflation?. Here is an outlook on the major events and an updated technical analysis for USD/CAD.

Canada’s current account deficit was wider than expected, at 11.9 billion. GDP came out better than expected, with 3.1% in Q2, but that came on top of a downwards revision for Q1. In the US, data was positive, especially with the upgrade of Q2 GDP and strong consumer confidence. What is the next direction of the pair?

1. Rate decision: Wednesday, 14:00. No change is expected in the 1% interest rate. The big question is: will the Bank of Canada stop saying that inflation is temporary, while it is moving higher? Also the recent strength in GDP does not really support a neutral bias, but rather a hawkish one.
2. Trade Balance: Thursday, 12:30. Canada’s balance turned positive, and with a bang: a surplus of 1.9 billion was seen in June. A smaller one is predicted for July: 0.9 billion Canadian dollars. Note that it is published together with the US trade balance.
3. Employment data: Friday, 12:30. Statistics Canada messed up and originally reported a loss of jobs instead of the 41.7K gain that was released afterwards. What will it be now? Probably a small gain in jobs, at 10.3K, and no change in the unemployment rate that stands at 7%.
4. Ivey PMI: Friday, 14:00. After two negative months, this survey of 175 purchasing managers returned to growth in July with 54.1 points. A slightly stronger figure is predicted now: 55.7 points. Note that a score above 50 points represents growth.

* All times are GMT.

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USD/CAD slips lower in holiday-thinned trade

The U.S. dollar drifted lower against the Canadian dollar on Monday in thin trade, as markets in both the U.S. and Canada remained closed for the Labor Day holiday.

USD/CAD slid 0.15% to 1.0860 from 1.0875 late Friday.

The pair was likely to find support at around 1.0825 and resistance at 1.0880.

The Canadian dollar rose to one-month highs against the U.S. dollar on Friday after official data showed that Canada’s economy grew at a faster-than-expected rate in the second quarter.

Statistics Canada reported that the economy expanded by an annualized 3.1% in the three months to June, ahead of expectations for 2.7%. Faster economic growth was attributed to a 17.8% increase in exports, while household spending jumped 3.8%.

On a quarter-over-quarter basis, the Canadian economy expanded 0.8%, following a 0.2% increase in the first quarter. It was the largest quarterly gain since the third quarter of 2011.

But the loonie, as the Canadian dollar is also known, backed off one-month highs as broadly upbeat U.S. data indicated that the economic recovery is on track.

On Thursday, revised data showed that U.S. gross domestic product expanded at an annual rate of 4.2% in the second quarter, up from a preliminary estimate of 4% and rebounding from a first quarter contraction.

Data on Friday showed that U.S. consumer sentiment rebounded to a seven year high in August, while another report showed that manufacturing activity in the Chicago region continued to expand in August.

This offset a separate report showing that U.S. consumer spending unexpectedly fell 0.1% in July.

Elsewhere, the loonie was close to 21-month highs against the broadly weaker euro, with EUR/CAD at 1.4266.

The single currency was pressured lower amid mounting expectations for quantitative easing by the European Central Bank as a way to shore up long term inflation expectations.

Concerns that sanctions against Russia would act as a drag on growth in the euro zone also continued to weigh on the shared currency following weak data on German second quarter growth and soft euro zone factory data earlier Monday.

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Bank of Canada leaves interest rate unchanged at 1%

The Bank of Canada left its benchmark interest rate unchanged in August and said it was neutral about its next policy rate move, it announced on Wednesday.

The BoC said it was leaving its overnight cash rate unchanged at 1%, in line with expectations.

"The Bank remains neutral with respect to the next change to the policy rate: its timing and direction will depend on how new information influences the outlook and assessment of risks,” said a statement accompanying the announcement.

BoC Governor Stephen Poloz was to comment on the decision at a press conference later in the day.

The Canadian dollar extended losses against its U.S. counterpart, with USD/CAD trading at 1.0886 compared to 1.0910 ahead of the decision.

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Canadian loses 11K jobs – unemployment rate 7%

Canada was expected to report a gain of 10.3K jobs in August and to see the unemployment rate unchanged at 7%. The labor productivity figure was expected to rise by 0.1% in Q2.

The Canadian dollar was showing strength against the USD rally.

The Canadian economy needs a strong US economy for internal demand. At the same time, the NFP report is released in the United States

USD/CAD Forecast Sep. 8-12

USD/CAD showed some movement in both directions, but ended the week unchanged, closing at 1.0877. This week’s highlight is Building Permits. Here is an outlook on the major events and an updated technical analysis for USD/CAD.

Canadian Employment Change and Ivey PMI tumbled in August, but the Canadian dollar managed to hold its own last week. In the US, Nonfarm Payrolls slumped to a 7-month low, while services and manufacturing PMIs beat the estimates.

Updates:

USD/CAD daily chart with support and resistance lines on it. Click to enlarge:

1. Building Permits: Monday, 12:30. This is the key event of the week. The indicator has posted back-to-back gains of over 13%, easily beating the estimates. The markets are braced for a sharp downturn in the upcoming release, with an estimate of -4.2%.
2. Housing Starts: Tuesday, 12:15. Housing Starts measures the number of new residential buildings and is an important gauge of the strength of the construction sector. Recent readings have looked strong, with readings of about 200 thousand. More of the same is expected in the August release, with an estimate of 197 thousand.
3. Capacity Utilization Rate: Wednesday, 12:30. This indicator measures the capacity used by manufacturers and other producers. Market estimates have been very close to actual readings, and little change is expected in the August reading, with an estimate of 82.8%.
4. NHPI: Thursday, 12:30. The New Housing Price Index is an important gauge of activity in the housing sector. The index has been steady, and posted a small gain of 0.2% last month, matching the forecast. Another 0.2% gain is expected in the August release.

* All times are GMT.

Building permits, July 2014

Canadian municipalities issued building permits worth $9.2 billion dollars in July, up 11.8% from June and the fourth consecutive monthly advance. The increase in July was mainly attributable to higher construction intentions for multi-family dwellings in Ontario and British Columbia as well as institutional buildings in Manitoba.

The value of residential building permits increased for the fifth consecutive month, up 18.0% to $5.0 billion in July. Gains were posted in seven provinces, led by Ontario and British Columbia, with Alberta a distant third. The largest decline occurred in Nova Scotia.

In the non-residential sector, the value of permits rose 5.2% to a record high $4.2 billion. This represented a fourth consecutive monthly increase. Gains were recorded in six provinces, with Manitoba accounting for most of the increase. In contrast, the largest decline occurred in Alberta, followed by Quebec. Both provinces posted large gains the previous month.

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Canada’s Capacity Utilization Rate 82.7% vs. 82.8% forecast

Canada’s capacity utilization rate rose less-than-expected last month, official data showed on Wednesday.

In a report, Statistics Canada said that Canada’s Capacity Utilization Rate rose to a seasonally adjusted 82.7%, from 82.1% in the preceding month whose figure was revised down from 82.5%.

Analysts had expected Canada’s Capacity Utilization Rate to rise 82.8% last month.

Canadian Dollar Falls to Almost 4-Month Low as Crude Oil Drops

The Canadian dollar fell to almost a four-month low as crude oil, the nation’s largest export, declined to its lowest point in more than a year.

The currency weakened against all its 16 major peers after a report showed home prices were unchanged in July, the second indicator this week to suggest the housing market is fading as a driver of economic growth. The Bank of Canada said last week it is waiting for strong-enough exports to take the burden of economic growth from over-indebted consumers, prompting speculation it would lag behind the U.S. Federal Reserve raising interest rates.

“The growth story still favors the U.S.,” said Jeremy Stretch, head of foreign-exchange strategy at Canadian Imperial Bank of Commerce, by phone from London. “When you overlay that with negative commodity correlation, then that just provides you with some impetus to be a buyer of the U.S. dollar against Canada.”

The loonie, as the Canadian dollar is called for the image of the aquatic bird on the C$1 coin, fell 0.6 percent to C$1.1003 per U.S. dollar at 9:25 a.m. It reached C$1.1032 on Sept. 9, the lowest since April 28. One loonie buys 90.88 U.S. cents.

Crude oil fell as much as 1.4 percent to $90.43 per barrel in New York, the lowest since May 2013, according to data compiled by Bloomberg.

Canada’s New Home Price Index was unchanged in July from the previous month, Statistics Canada said from Ottawa.

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