Dollar/CAD suffered from Trump's move on the Iran deal and as oil priced sold the fact. What's next? The double-feature inflation and retail sales reports stand out. Here are the highlights and an updated technical analysis for USD/CAD.
The US is abandoning the Iran nuclear deal and imposing sanctions on the country. This pushed oil prices higher and thus supported the Canadian dollar. The risk-off sentiment that accompanied the initial news faded away and allowed the loonie to extend its gains. The move somewhat reversed on Friday as Canada published disappointing jobs report that showed a loss of 1.1K jobs. The pair moved back up.
Updates:
USD/CAD daily graph with support and resistance lines on it. Click to enlarge:
Manufacturing Sales: Monday, 12:30. Sales at the manufacturing level provide insights for the wider economy. The value of sales increased last time by 1.9% and may show a moderation now.
Foreign Securities Purchases: Thursday, 12:30. Flows of money into Canada serve as a measure of confidence and also impact the exchange rate. The surplus was only 3.96 billion in February, below expectations. It could widen now.
ADP Non-Farm Employment Change: Thursday, 14:30. The private sector report by Automated Data Processing comes after the official release but still provides interesting insights. The firm showed a gain of 42.3K in March.
BOC Review: Thursday, 14:30. The Bank of Canada publishes this report twice per year and it tends to have a weaker impact than the Business Survey. Nevertheless, the updates on the economy will be of interest.
Inflation report: Friday, 12:30. Inflation surprised to the downside in March, with headline CPI advancing by 0.3% and Core CPI by 0.2%. The other measures of price development were OK with Common CPI up by 1.9% y/y, the Median CPI at 2.1%, and Trimmed CPI at 2%. Similar figures are likely for April.
Retail Sales: Friday, 12:30. Competing with the inflation report, retail sales lag and are for the month of March this time. Back in February, Retail Sales rose by 0.4% m/m while core sales remained flat. Better data is on the cards now.
