October 9, 2015 FX Update- Canadian Dollar
FX Morning Update October 9, 2015
USD/CAD Open: 1.2960-1.2961 Overnight Range: 1.2900-1.3022
The Canadian dollar was rangebound in overnight currency exchange markets. Oil is at $50.32 and gold is at $1,154. US futures are higher. Today, Canada releases employment data for September.
The short term Canadian dollar technicals are neutral. For today, USD resistance is at 1.3033. Support is at 1.2883.
The Canadian dollar is stronger this morning, on the basis of a number of factors. Employment data for September was released today, a gain of 12,000 jobs against expectations of a gain of 10,000. However, unemployment has begun to climb, now at 7.1%, as more people enter the labour force. Full-time job figures were notably lower, with this being offset by part-time work (full-time jobs down by 62,000, part-time jobs up by 74,000). Ontario saw a drop of 34,000 jobs in September.
Higher oil prices (above $50/barrel), as well as dovish Fed minutes from September’s FOMC meeting are providing tailwinds for the Canadian dollar. A hawkish surprise from the September FOMC meeting was partially priced into the market, as market participants were led to believe that the September rate-hold was a close decision. In actuality, the September minutes were far less hawkish than expected, amidst concerns centering on global economic growth (more specifically, China), as well as domestic stock market volatility.
A rate hike from the Fed before the end of 2015 cannot yet be ruled out, but has been looking less likely of late. There is still several months’ worth of key data releases for Fed officials to digest before making their December rate-policy decision. Monetary policy between Canada and the US continues to be divergent, which limits Canadian dollar upside over the short-medium term.
Today’s Suggested Range USD/CAD: 1.2900 – 1.3000
Sincerely,
Rahim Madhavji | Knightsbridge Foreign Exchange | Toll-Free: 1-877-355-5239
www.knightsbridgefx.com
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