USDCAD in Focus After Top US Economic Advisor Resigns
Canadian Dollar News and Talking Points
- The resignation of NEC chair Gary Cohn puts trade war fears firmly back in the market.
- The Bank of Canada is unlikely to hike interest rates but the policy statement will be carefully parsed.
The Traits of Successful Traders and how to find the Number One Mistake Traders Make are just two of the most widely read reports in ourFree Trading Guides.
USDCAD Strength May Remain For Longer After NEC Head Resigns
The surprise resignation of US National Economic Council director Gary Cohn has heightened fears that US President Donald Trump’s much talked about trade tariffs are squarely back on the cards, and Canada will be one of the countries hit the hardest. Cohn who strongly opposed the President’s plans for tariffs will leave in the coming weeks, leaving POTUS with a clearer path to imposing trade tariffs on aluminium and steel with Canada set to be one of the biggest losers. In addition, NAFTA negotiations are set to drag on leaving the Canadian central bank fighting both domestic and international battles.
Bank of Canada (BoC) To Leave Interest Rates Untouched
The BoC is expected to leave interest rates unchanged at 1.25% after January’s 0.25% hike. Market probability for a rise has fallen sharply in the past few weeks – down to around 35% from 50%+ - especially after the last jobs report showed a net employment change of -88k against expectations of +10k, the largest decrease since January 2009. Canada will release its February labour report on Friday at 13:30 GMT. While interest rates are expected to remain unchanged, the BoC policy statement will be studied for the central bank’s latest views on NAFTA and the effect of the proposed trade tariffs.
DailyFX analyst David Song will be covering the BoC Rate Decision Live from 14:45 GMT.
USDCAD Strong But Has It Run Ahead Of Itself?
The latest USDCAD weekly chart shows the pair trading around highs seen in July 2017 and around 7 cents higher than this year’s low print. The pair has completed a reverse head and shoulders pattern - December 18 and February 26 candles – and should push higher with 1.3150 the next upside target. However with a lot of Loonie weakness already priced-in the quote, and with the stochastic indicator currently in overbought territory, one-way upside is not guaranteed and potential buyers of the pair should take a step back and wait for any sell-off.
USDCAD Price Chart Weekly Time Frame (April 2015 – March 7, 2018)
Are you new to FX trading or are you looking to improve your trading skill sets? We can help you along your journey with a comprehensive range of constantly updated guides and trading tools – they are all Free to Download Here.
What’s your opinion on USDCAD?Share your thoughts with us using the comments section at the end of the article or you can contact the author via email at email@example.com or via Twitter @nickcawley1.
--- Written by Nick Cawley, Analyst
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.