Canadian dollar has recorded slight losses

Canadian dollar has recorded slight losses in the Tuesday session. Currently, USD/CAD is trading at 1.2606, up 0.37% on the day. On the release front, it’s a very light day. There are no US releases on the schedule. The sole Canadian indicator, Wholesale Sales, is expected to slow to 0.4%. On Wednesday, the Federal Reserve will release the minutes of its January meeting. As well, the US will release Existing Home Sales.
It’s been an eventful few weeks for Jerome Powell, who has just commenced his stint as chair of the Federal Reserve. Strong US data in recent weeks has raised speculation that the Fed may need to accelerate the pace of interest rate hikes in 2018. The Fed is currently projecting three rate hikes this year, but if inflation continues to move upwards, many analysts are expecting that the Fed could press the rate trigger four, or even five times in 2018. Meanwhile, concern over higher inflation and more rate hikes sent the stock markets into a frenzy earlier in February. Powell sought to reassure the markets that the Fed was monitoring the situation, but it’s doubtful that the Fed can do much to prevent volatility in the markets.
USD/CAD has posted small gains in the Asian and European sessions
•1.2494 is providing support
•1.2630 is a weak resistance line
•Current range: 1.2494 to 1.2630
Further levels in both directions:
•Below: 1.2494, 1.2351, 1.2190 and 1.2060
•Above: 1.2630, 1.2757 and 1.2855
USD/CAD ratio is showing little movement in the Tuesday session. Currently, short and long positions are evenly split, indicative of a lack of trader bias as to which direction USD/CAD will take next.

Prices for foreign-made goods

Prices for foreign-made goods imported to the U.S. rose in January, driven by a broad range of product price increases and capping a week of solid inflation readings.
Import prices increased 1% in January from a month earlier, the Labor Department said Friday. Economists surveyed by The Wall Street Journal expected a 0.7% increase in import prices. The January rise matched November's increase and hasn't been exceeded since May 2016, when the index grew 1.2%.
Unlike most measures of inflation, import prices are not adjusted for seasonality.
Petroleum-import prices rose 4.3% from December. Prices for imports excluding petroleum increased 0.5% last month, an increase last exceeded in April 2011.
Over the past year, overall import prices have grown 3.6%.

USD/CAD ticked lower

USD/CAD ticked lower in the Asian session. In European trade, the pair dropped slightly but has recovered
•1.2351 is providing support
•1.2494 was tested earlier in resistance and remains fluid
•Current range: 1.2351 to 1.2494
Further levels in both directions:
•Below: 1.2351, 1.2190 and 1.2060
•Above: 1.2494, 1.2630, 1.2757 and 1.2855

USD/CAD ratio is showing slight movement towards long positions. Currently, long positions have a majority (53%), indicative of trader bias towards USD/CAD breaking out and moving lower.The Canadian dollar has paused on Thursday, after posting strong gains a day earlier. Currently, USD/CAD is trading at 1.2491, down 0.01% on the day. On the release front, Canada releases ADP Non-farm Employment Change. In the US, there are a host of indicators, highlighted by PPI and Core PPI reports for January. Both indicators are expected to record gains after declining in the December readings. The US will also release key manufacturing reports and unemployment claims. On Friday, the US releases key housing and consumer confidence numbers. Canada will publish Manufacturing Sales.
It’s been a rough February for the Canadian dollar, but the currency jumped on the bandwagon on Wednesday, as the US dollar posted broad losses. The Canadian currency posted its best one-day performance in 2018, gaining 0.09% against the greenback. The US dollar sagged as investors focused on poor retail sales reports in January. Retail Sales was flat at 0.0%, short of the estimate of 0.5%. Core Retail Sales declined 0.3%, well off the forecast of +0.2%. On the inflation front, CPI jumped 0.5%, above the estimate of 0.3%. Last week’s market sell-off, which sent the US dollar higher against other currencies, was triggered by fears of higher inflation. This strong CPI reading has raised concerns that investors could again lose their risk appetite and send the Canadian dollar lower.
 

USD/CAD ratio

The Canadian dollar continues to have an uneventful week. In the Tuesday’s session, the pair is trading at 1.2587, up 0.07% on the day. On the release front, there are no Canadian indicators on the schedule. In the US, the sole indicator is the NFIB Small Business Index, which improved to 106.9, above the estimate of 106.2 points. On Wednesday the US releases CPI and retail sales indicators. Traders should be prepared for movement from USD/CAD during the North American session.
Last week’s market selloff boosted the US dollar, at the expense of the Canadian dollar and most other major currencies. The Canadian dollar dropped 1.2% last week, and is down 2.2% in February, erasing the gains we saw in January. Interestingly, the catalyst for the current turbulence has been solid economic data in the US, namely, improved payrolls and wage growth reports. Is the correction over? It’s too early too tell, since much of the sell-off is related to investor concerns over possible interest rate hikes by major central banks. The Bank of England has said it could accelerate its pace of hikes, and the Federal Reserve could follow suit if inflation moves higher.
USD/CAD ratio is almost unchanged in the Tuesday session. Currently, long and short positions are evenly split, indicative of a lack of trader bias towards as to what direction USD/CAD takes next.USD/CAD was flat in the Asian session and has posted limited movement in the European session
•1.2494 is providing support
•1.2630 is providing resistance
•Current range: 1.2494 to 1.2630
Further levels in both directions:
•Below: 1.2494, 1.2351, 1.2190 and 1.2060
•Above: 1.2630, 1.2757 and 1.2855

EUR/USD

EUR/USD edged higher in the Asian session. The pair has reversed directions in European trade and is moving downards
•1.2200 has switched to a support role after losses by EUR/USD on Tuesday
•1.2286 is the next resistance line
Further levels in both directions:
•Below: 1.2200, 1.2092 and 1.1961
•Above: 1.2286, 1.2357, 1.2481 and 1.2569
•Current range: 1.2200 to 1.2286
•
EUR/USD ratio has shown strong movement towards long positions. Currently, short positions have a majority (57%), indicative of EUR/USD reversing directions and moving higher.

USD/CAD

After some spectacular readings, Canada’s economy is expected to show more modest job creation in January, with an estimate of 10.3 thousand. The unemployment rate is forecast to edge up from 5.7% to 5.8%. If these predictions are within expectations, the Canadian dollar could gain some ground on Friday, and end a tough week on a positive note.USD/CAD ratio is unchanged in the Monday session. Currently, long positions have a majority (51%), indicative of a lack of trader bias towards as to what direction USD/CAD takes next.
USD/CAD has showed little movement in the Asian and European sessions
•1.2494 is providing support
•1.2630 is a weak resistance line
•Current range: 1.2494 to 1.2630
Further levels in both directions:
•Below: 1.2494, 1.2351, 1.2190 and 1.2060
•Above: 1.2630, 1.2757 and 1.2855

S&P futures vs fair value: +13.50,,2/9

S&P futures vs fair value: +13.50. Nasdaq futures vs fair value: +33.30.
The S&P 500 futures trade 14 points, or 0.5%, above fair value.
It's been a pretty terrible week for the U.S. equity market, with the S&P 500, the Dow Jones Industrial Average, and the Nasdaq Composite losing around 6.5% apiece. The losses leave the major averages between 9.7% and 10.4% below the record highs they hit on January 26.
All 11 sectors have moved lower this week, with losses ranging between 4.9% (utilities) and 8.1% (energy).

The CAD

Canada’s unemployment rate ticked up last month after hitting a 10-year low in December, as both the public and private sectors shed workers.
The Canadian economy lost a net -88k jobs in January on a seasonally adjusted basis. The market expectations were for an increase in employment of +10k.
Canada’s unemployment rate ticked a tad higher to +5.9% in January, up from a revised reading of +5.8% in December.
The loonie took it on the chin immediately, moving from C$1.2601 to an intraday dollar high of C$1.2694. The CAD has since pared all of those losses and then some, trading atop of C$1.2600.
The CAD bears will have been disappointed with the initial price action as there were looking for better USD levels to sell their longs. A plethora of dollar sell orders had been scattered atop of the psychological C$1.2700 handle.The USD/CAD is trading lower on the day at C$1.2585.

Canadian dollar

Canadian dollar is steady in the Tuesday session, after considerable losses in the past two sessions. Currently, the pair is trading at 1.2556, up 0.16% on the day. On the release front, there are two key Canadian events. Canada’s trade deficit is expected to narrow to C$2.3 billion, and Ivey PMI is forecast to improve to 60.7 points. In the US, the key event of the day is JOLTS Job Openings, which is expected to climb to 5.95 million. On Wednesday, Canada releases Building Permits.
The US dollar continues to post broad gains this week, and the Canadian dollar has declined 1.0% and is at its lowest level since mid-January. The greenback has pushed higher as global stock markets are in red territory. US stock markets started the week with strong losses, and the Dow Jones posted its biggest loss in one day on Monday, losing 1,500 points at one stage. The index ended the day down 4.6%, and the downward trend has continued in the Asian and European markets on Tuesday. As investors head for the hills, analysts are scrambling to find the reasons behind the massive sell-off in the stock markets. Some experts are pointing to the changing of the guard at the Federal Reserve, with Jerome Powell replacing outgoing chair Janet Yellen on Saturday. However, Powell is not expected to change current monetary policy, so it’s unclear how Powell would have rubbed the markets the wrong way after just one day at his new job.

EUR/USD

There were no dramatic announcements from the Federal Reserve on Wednesday, and EUR/USD showed little movement in the Wednesday session. The Fed held the course on monetary policy, with the benchmark rate remaining between 1.25%-1.50%. In the rate statement, policymakers said that they expected the economy to continue to expand at a moderate pace and that the labor market would remain strong in 2018. What was more noteworthy was that the Fed predicted that inflation would rise to the Fed’s 2 percent target this year. This marks an upgrade in the inflation forecast, as the December statement said that inflation was expected to “remain somewhat below 2 percent.” Higher inflation is likely to open the door to tighter monetary policy, and the Fed appears on track for three, or even four rate hikes in 2018, assuming that the US economy remains strong.

dollar fall against the Japanese yen

The dollar fall against the Japanese yen "has established a near-term bottom at the 108.50 level," according to BK Asset Management. USD/JPY is last up 0.1% at 109.30. With U.S. non-farm payrolls expected to come in higher on Friday--up by 177,000, compared with a 148,000 increase in December, according to a WSJ poll--and with "the Fed appearing resolute to normalize monetary policy in earnest, the decline in the dollar may be coming to an end for the near term," says BK. Still, against the euro and sterling, the dollar continues to lose ground, with EUR/USD up 0.3% at 1.2452 and GBP/USD rising 0.2% to 1.4222.