News image

Canadian Dollar Update November 8, 2019 – Canadian Dollar counting down to Canada jobs report

USD/CAD Open: 1.3174-1.3175 Overnight Range: 1.3172-1.3237

Oil is at $55.94 and gold is at $1,467.00. US markets are mixed today.

The short-term USD/CAD technicals are neutral-bearish. For today, USD resistance is at 1.3260. Support is at 1.3201.

Canadian dollar traders are awaiting the Statistics Canada release of the monthly employment report. This report tends to spark a flurry of FX volatility upon release but its impact on day to day trading fades within a couple of days. Today’s announcement will be the ninth report of 2019. Of those reports, seven surprised to the upside, and five of those surprise gains were substantial. The two reports that were below expectations were marginal.

Canada posted a gain of 136,800 jobs between August and September, substantially above the usual job gains for that period. For today, forecasters are predicting a gain of 15,900 jobs with the unemployment rate unchanged at 5.5%. However, the magnitude of the recent job totals raises the risk of a sharply weaker result.

As previously noted, Canadian dollar price action is determined by external influences as well as domestic ones, and today is no different. The US dollar is in demand. It rose yesterday and again overnight due to optimistic US/China trade expectations. Arguably, the Canadian dollar will respond more aggressively to disappointing employment data, then it will to a strong report.

US dollar buyers came out of the woodwork in the past twenty-four hours. Traders responded to reports that China and US trade negotiators agreed to a phased-in rollback of trade tariffs and are hoping to have a deal completed by next Friday. However, other reports are suggesting that plans to roll back tariffs are meeting with serious opposition by other US officials. US dollar buyers may be getting ahead of themselves, especially since most analysts don’t believe any deal could be signed much before the end of December.

EURUSD sellers were evident in Europe and modest selling occurred after Toronto opened. The single currency dropped from 1.1054 in Asia to 1.1027 in Toronto. ECB Governing Council member Bostjan Vasle said the bank would continue with its current policy stance until conditions improve. The prospect of a rebound in US economic growth from a repeal of tariffs while the Eurozone economy remains sluggish, fueled the selling.

GBPUSD continued to suffer from yesterday’s dovish Bank of England monetary policy stance. The BoE left rates unchanged, but there were two dissenters who wanted to cut rates. The BoE is concerned about downside risks to the economy.

US Michigan Consumer Sentiment data is due today and forecast at 95.9 compared to 95.5 last month.

Today’s Suggested Range USD/CAD: 1.3120 – 1.3220

Click Here to Subscribe

By KBFX | November 8, 2019 | Daily Update | 0 comments

Leave a Comment

Popular Content