USD/CAD – Stable as US, Canadian Trade Data Improves
The Canadian dollar is steady on Wednesday, as USD/CAD trades in the mid-1.09 range early in the North American session. In economic news, there was positive news on both sides of the border, as Canadian and US Trade Balance readings pointed to improvement in July.
Canada’s trade data surprised the markets, with a strong trade surplus of $1.9 billion in July. The markets is used to seeing more deficits than surpluses, and the July estimate stood at $-0.1 billion. The July reading was the best we’ve seen since April 2012. Meanwhile, the US trade deficit unexpectedly narrowed in July, dropping to -$41.5 billion. This was the lowest deficit since April, and easily beat the estimate of $-44.2 billion. Trade Balance is closely linked to currency demand, since foreigners must purchase the local currency in order to buy domestic goods and services.
US PMIs continue to point upwards, indicative of an improving US economy. On Tuesday, ISM Non-manufacturing PMI looked sharp, rising to 58.7 points last month. This easily beat the estimate of 56.6, and was the index’s best showing since February 2011. This follows an excellent Manufacturing PMI reading last week, with the index climbing to 57.1 points, a three-year high. There was more positive news out of the US on Tuesday, as Factory Orders had an impressive July, gaining 1.1%. These solid numbers point to healthy expansion in the US manufacturing and services sectors, which has resulted in gains for the US dollar against most of its major rivals.
USD/CAD for Wednesday, August 6, 2014
USD/CAD August 6 at 13:55 GMT
USD/CAD 1.0941 H: 1.0986 L: 1.0941
USD/CAD Technical
- USD/CAD was uneventful in the Asian session. The pair gained ground in the European session touching a high of 1.0986, a three-month high. USD/CAD then retracted, and this movement continues in the North American session.
- 1.0961 remains an immediate resistance line. 1.1004 is stronger.
- 1.0852 is providing strong support.
- Current range: 1.0852 to 1.0961
Further levels in both directions:
- Below: 1.0852, 1.0775, 1.0678 and 1.0572
- Above: 1.0961, 1.1004, 1.1124 and 1.1278
USD/CAD Fundamentals
- 12:30 Canadian Trade Balance. Estimate -0.1.B. Actual +1.9B.
- 12:30 US Trade Balance. Estimate -44.2B. Actual -41.5B.
- 14:30 US Crude Oil Inventories. Estimate -1.1M.
*Key releases are highlighted in bold
*All release times are GMT
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities.
Source: marketpulse
