After gaining over 1% last week, USD/CAD has started the week with slight losses. Currently, the pair is trading at 1.3392, down 0.14% on the day. There are no Canadian events on the schedule.
US durable goods orders beat expectations
The week started off on a mixed note, as durable goods climbed 7.3% in June. This beat the estimate of 7.0% and marked a second straight gain. The core reading was not as strong, as the gain of 3.3% was shy of the estimate of 3.5%.
Investors have not been attracted to the US dollar, despite its safe-haven status in times of trouble. The Canadian dollar took advantage with gains of 1.2% last week, its best week since early June.
Ahead – Fed Decision, US GDP
We can expect some movement from the US dollar this week, with two key events which could shake up the currency markets.
The Fed holds its monthly policy meeting on Wednesday, and there is speculation that the Fed will introduce further easing measures, which could push the greenback lower. One option for the Fed is to introduce negative rates, which have already been adopted by central banks in Japan and Europe. Fed Chair Jerome Powell has insisted that negative rates are not on the table, despite pressure from some Fed members. As well, the US releases the first estimate of GDP for the second quarter, with the forecast standing at a staggering -35.0%. Even if the decline is substantially lower, it’s quite likely that investors would react negatively and send the US dollar downwards.
USD/CAD posted slight losses in the Asian session and showed limited movement in European trade.
- 1.3380 is under pressure in support. Below, we find support at 1.3344
- 1.3448 is the next line of resistance, followed by 1.3480