USD/CAD Forecast Dec. 31- Jan. 4 2019 – Slide Continues For Struggling Canadian Dollar

The Canadian dollar continues to stumble, as USD/CAD posted gains for a sixth straight week. This week’s highlights are employment change and the unemployment rate. Here is an outlook for the highlights of this week and an updated technical analysis for USD/CAD.

It was another week in the red for the wobbly Canadian dollar. The minor currency has taken it on the chin in recent weeks, as continuing volatility in the equity markets has soured risk appetite and investors have flocked to safe-haven assets. Global trade tensions remain high, and investors remain jittery, even with the announcement that U.S and Chinese trade teams will meet this week. If the sides don’t make progress, the U.S. has said it will impose further tariffs on China on March 1. This could mean more headwinds for the Canadian dollar as we enter 2019.

Another factor weighing on the Canadian currency is the decline in oil prices. WTI Crude has fallen to $45 a barrel, and a weakened global economy could mean that oil prices remain depressed for the foreseeable future.

  1. Manufacturing PMI: Wednesday, 14:30. This indicator provides a gauge of the strength of the manufacturing sector. The indicator has shown slight expansion in the past few releases.
  2. Employment Change: Friday, 13:30. This key indicator can have a strong impact on the direction of USD/CAD. In November job creation was unexpectedly strong, with a huge gain of 94.1 thousand. This easily beat the estimate of 10.5 thousand.
  3. Unemployment Rate: Friday, 13:30. Unemployment continues to fall and dropped to 5.6% in November, below the forecast of 5.8%.
  4. Raw Materials Price Index. Friday, 13:30. This inflation indicator continues to struggle, posting three straight declines. Will wee see any improvement in the December release?

*All times are GMT

USD/CAD Technical Analysis

Dollar/CAD didn’t miss a beat, posting gains every day last week. The pair continues to break through resistance lines and punched past 1.3560 late in the week (mentioned last week).

1 2
View single page >> |

Disclaimer: Foreign exchange (Forex) trading carries a high level of risk and may not be suitable for all investors. The risk grows as the leverage is higher. Investment objectives, risk appetite and ...

more
How did you like this article? Let us know so we can better customize your reading experience. Users' ratings are only visible to themselves.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.