USDCAD Movement
For the 24 hours to 23:00 GMT, the USD rose 0.50% against the CAD to close at 1.0646, after impressive retail sales for November and upbeat business inventories data for October from the US. The dismal unemployment claims data did little to dampen expectations that the Federal Reserve would soon announce a tapering of its $85 billion per month quantitative easing programme.
The Canadian Dollar weakened, after the new housing prices in Canada registered the slowest annual increase, at 1.5%, since February 2010, and compared to a 1.6% increase in the earlier month. The Loonie further lost momentum after the Bank of Canada (BoC) Governor, Stephen Poloz reiterated the central bank’s recent dovish shift. He stated that he expects the Bank of Canada’s policy rates to stay where they are “for some time,” and indicated it could take as long as two more years for the medium-term inflation target to hit 2%. He clarified that the central bank would solely focus on achieving his inflation target over the next two years and refrain from sending signals that would depress the Canadian dollar in order to boost exports.
In the Asian session, at GMT0400, the pair is trading at 1.0648, with the USD trading marginally higher from yesterday’s close.
The pair is expected to find support at 1.0585, and a fall through could take it to the next support level of 1.0523. The pair is expected to find its first resistance at 1.0684, and a rise through could take it to the next resistance level of 1.0721.
The Loonie’s present key focus would be consumer prices and retail sales data, slated to release at the end to the week.
The currency pair is trading above its 20 Hr and 50 Hr moving averages.
