The Canadian dollar has rebounded on Wednesday, recording considerable gains. Currently, USD/CAD is trading at 1.2896, down 0.54% on the day. On the release front, Canada trade deficit is expected to narrow to C$3.4 billion. The markets are braced for a poor showing from Canadian Building Permits, with an estimate of -1.0%. Canadian Ivey PMI is forecast to drop to 69.7 points. There are no major events in the U.S on the schedule. On Thursday, the U.S releases unemployment claims. The Bank of Canada will release its semi-annual Financial System Review, followed by a press conference with BoC Governor Stephen Poloz.
Canada is the host of the G-7 meetings this year, and finance ministers from six countries were united in their criticism of US Treasury Secretary Steve Mnuchin over a brewing trade war started by the United States. Last week, the Trump administration imposed stiff tariffs on Canada, Mexico and the European Union. Canadian Prime Minister Trudeau tweeted that the tariffs were “unacceptable” and said that Canada would “impose dollar for dollar tariffs for every dollar levied against Canadians by the US.” Canada will host the G-7 leaders, and European leaders have made clear that they want the U.S tariffs to be high on the agenda. If the trade battle escalates, Canada’s export-reliant economy could take a hit and drag down the Canadian dollar.
After weeks of speculation, the much-anticipated summit between the US President Trump and North Korean President Kim Jong-un is back on. The two leaders will meet on June 12 in Singapore, marking the first ever face-to-face meeting between leaders of the U.S and North Korea. Trump has tried to lower expectations, saying the sides are unlikely to reach an agreement on North Korea relinquishing its nuclear weapons. Still, the fact that the two leaders are meeting is a sign that significant progress is being made in the long-standing dispute between the two Koreas.
Wednesday (June 6)
- 8:30 Canadian Trade Balance. Estimate -3.4B
- 8:30 Canadian Building Permits. Estimate -1.0%
- 8:30 US Revised Nonfarm Productivity. Estimate 0.7%
- 8:30 US Revised Unit Labor Costs. Estimate 2.7%
- 8:30 US Trade Balance. Estimate -50.0B
- 10:00 Canadian Ivey PMI. Estimate 69.7
- 10:30 US Crude Oil Inventories. Estimate -2.0M
Thursday (June 7)
- 8:30 US Unemployment Claims. Estimate 223K
- 10:30 BoC Financial System Review
- 11:15 BoC Governor Poloz Speaks
*All release times are DST
*Key events are in bold
USD/CAD for Wednesday, June 6, 2018
USD/CAD, June 6 at 8:05 DST
Open: 1.2967 High: 1.2974 Low: 1.2900 Close: 1.2907
USD/CAD posted small losses in the Asian session and has edged lower in European trade
- 1.2850 is providing support
- 1.2943 has switched to a resistance role after losses by USD/CAD on Wednesday
- Current range: 1.2850 to 1.2943
Further levels in both directions:
- Below: 1.2850, 1.2757 and 1.2614
- Above: 1.2943, 1.3015, 1.3125 and 1.3224
OANDA’s Open Positions Ratio
USD/CAD ratio is unchanged this week. Currently, long positions have a majority (62%), indicative of USD/CAD reversing directions and moving higher.
- This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.