The Canadian dollar continues to post gains in the Tuesday session, after starting the week with strong gains. Currently, is trading at 1.2665, down 0.27% on the day. On the release front, Canadian construction indicators are in focus, with the markets braced for soft data. Building Permits is forecast to decline 1.5%, after two straight gains. Housing Starts are expected to drop sharply to 219 thousand. In the US, is expected to edge lower to 0.1%, and is forecast to remain unchanged at 0.2%. On Wednesday, the US releases consumer inflation reports and the Federal Reserve will publish the of its March rate meeting.
Investors are breathing a sigh of relief after Chinese President Xi Jimping sent out a conciliatory message earlier on Tuesday. Xi was speaking at a development conference in China, and promised to lower tariffs on vehicle imports into China. This has been a major sticking point between the US and China, with President Trump complaining that China has a 25% tariff on US vehicle imports, yet the US only charges 2.5% on Chinese vehicles.
Although China has previously declared that it would reduce the tariffs on vehicles, the markets were looking for some positive news, as the trade battle between the two largest economies in the world has shaken the markets in recent weeks. Xi added that China was looking to solve issues through dialogue rather than confrontation, and the markets are hoping that the US and China can avert a trade war, which could drag down the global economy.
On Friday, the US released a very soft nonfarm payroll report. The indicator fell to 103 thousand, well off the forecast of 188 thousand. Still, the markets do not appear overly concerned, as payroll reports often sag in March. On a more positive note, wage growth improved to 0.3%, up from 0.1% a month earlier. This release matched the estimate. The improvement is likely to reinforce sentiment that the Fed could press the rate trigger four times in 2018, which could push the US dollar higher.
Another Freaky Friday
USD/CAD Fundamentals
Tuesday (April 10)
Wednesday (April 11)
*All release times are GMT
*Key events are in bold
USD/CAD for Tuesday, April 10, 2018
USD/CAD Chart
USD/CAD, April 10 at 8:00 EST
Open: 1.2698 High: 1.2709 Low: 1.2675 Close: 1.2663
USD/CAD Technical
S3 S2 S1 R1 R2 R3 1.2397 1.2496 1.2590 1.2687 1.2757 1.2850
USD/CAD inched lower in the Asian session and has posted slight losses in European trade
Further levels in both directions:
OANDA’s Open Positions Ratio
USD/CAD ratio is showing slight movement towards long positions. Currently, long and short positions are almost evenly split, indicative of a lack of bias towards the direction of USD/CAD.
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