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USD/CAD calm on light data calendar

USD/CAD calm on light data calendar




USD/CAD is drifting for a second successive day. In the North American session, the pair is trading at 1.3131, up 0.11% on the day.

US jobless claims sparkle

The weekly US Initial Jobless Claims report had an excellent week, with a gain of 787 thousand. This crushed the estimate of 860 thousand and was the lowest figure since mid-March, prior to the spread of Covid-19, which led to skyrocketing unemployment numbers. However, the positive news was tempered by the Conference Board Leading Economic Index, which slowed to 0.7% in September. The reading missed the consensus of 0.8%. The weakening pace of improvement is a sign that US recovery could be losing steam in the fourth quarter. The index posted a 1.4% increase in August and a 2.o percent gain in July. The Canadian dollar has shown a muted response to the mixed data on Thursday.


Deadlock over US stimulus deal

The financial markets continue to react to the on-again-off-again fiscal stimulus talks between the Republicans and Democrats. Nancy Pelosi and Treasury Secretary Steven Mnuchin have been holding talks, but the prospect of a deal between the Democrats and Republicans are dimming. Even if a deal was reached tomorrow, the stimulus package would not be implemented until after the election. A stimulus agreement would be good news for President Trump, but Republicans senators have their own election campaigns to worry about, and a massive spending package will not win many votes among conservative voters. It appears that barring a change in stance by Republican senators, the fiscal package is unlikely to materialize. A no-deal scenario is bullish for the US dollar, as risk sentiment would likely drop if there is no agreement.


USD/CAD Technical

  • We find support at 1.3089. This is followed by support at 1.3047
  • 1.3188 is the next resistance line. Above, there is resistance at 1.3245
  • USD/CAD broke below the 10-day MA on Tuesday, which is a sign of a downward trend

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