The USDCAD pair closed the week off its highs and it would be an interesting week ahead as far as this pair is concerned. The first part of the week saw
The USDCAD pair closed the week off its highs and it would be an interesting week ahead as far as this pair is concerned. The first part of the week saw the dollar holding steady but the CAD was affected by the bad incoming data from he previous week and this led to the pair moving higher through the 1.26 region and threatening to break through the 1.27 region as well.
This move happened due to the fact that the retail sales data from Canada released in the previous week turned out to be very week and this raised doubts on whether the BOC would be inclined to raise rates in the near future under such circumstances. Though the CAD began to weaken on this news, the market awaited the BOC rate statement and the press conference as it still held out some hope that the BOC would be hawkish after all. But these hopes were laid to waste as the BOC made it very clear that there would not be any rate hike in 2017 and probably for the first few months atleast of 2018. This was a disappointment for the markets which led to a sell off in the CAD.
On the other hand, the dollar held steady and was even boosted by some strong advance GDP data which raised hopes for a rate hike in December. This made the pair to push through 1.28 and head towards 1.29 at the end of the week. But late in the week, the prices were beaten back by reports that said that Powell could be made the next Fed Chair. Also, the oil prices shot through the roof which helped to strengthen the CAD and forced the pair to close off the highs for the week.
Looking ahead to the coming week, it is likely to see some CAD strength initially as this period of the year involves the payments of oil settlements. Then later in the week, we have the employment reports from both the US and Canada and both of these are likely to have a lot of influence on the prices and if the US data comes out strong, we could see the USDCAD rocket higher as this would confirm the Fed rate hike in December.
Colin specializes in developing trading strategies and analyze financial instruments both technically and fundamentally. Colin holds a Bachelor of Engineering From Milwaukee University.