VBCE Daily Foreign Exchange Update for Wednesday, Feb. 4th, 2015

After yesterday's decline from 1.2645 to 1.2353, USDCAD moves back to 1.2592

 

USDCAD spot rate: 1.2558 - 1.2563 (AS AT 8:07AM PST)

RANGES:	Asia:	1.2390	to	1.2444
	Europe:	1.2408	to	1.2476
	North America:	1.2440	to	1.2592

Technical Support / Resistance:

S2	S1	R1	R2
1.2260	1.2350	1.2592	1.2645

Key Economic Data Releases:

-Canada Ivey purchasing managers index: 45.4 (exp. 53.9)

-U.S. ADP employment change: 213k (exp. 225k)

-U.S. ISM non-manufacturing purchasing managers index: 56.7 (exp. 56.3)

-U.S. Markit services PMI: 54.2 (prev. 53.3)

Key Event Calendar:

DATE	CANADA	U.S.A.
Feb. 5	Int’l merchandise trade	Trade balance, jobless claims
Feb. 6	Net employment change	Non-farm payrolls, unemployment rate,
	Unemployment rate, participation	participation rate
	rate, building permits

Yesterday, after climbing to 1.2645, USDCAD plunged to 1.2353 before bouncing to close the session near 1.2396. Since last Thursday, oil has gained nearly 25% causing a sharp 4.5 cent correction lower in USDCAD over the past 3 trading days. Overnight, USDCAD held a 1.2390 – 1.2476 range. The pairing opened this morning’s session at 1.2440 but has gapped higher after breaking above yesterday’s broken support level at 1.2503. The main catalyst is a 5% decline in oil and the 7:00am release of the Canadian Ivey purchasing managers index which was much weaker than expected. After reaching 1.2592, USDCAD has since fallen back towards 1.2540. Tomorrow, Canada’s trade deficit is expected to widen from $640 million to $1 billion. The U.S. trade deficit is expected to narrow from $39 billion to $38 billion. On Friday, Canada is expected to add 4,500 jobs after losing 4,300 in December. The unemployment rate is expected to hold at 6.7%. The U.S. is expected to add 235,000 jobs, down from the 252,000 added in December. The unemployment rate is expected to hold steady at 5.6%. Currently, the TSX is down 0.32% while the DJIA is up 0.18%. EURCAD is up 0.70% trading between 1.4220 and 1.4386. GBPCAD is up 2% trading between 1.8800 and 1.9190. JPYCAD is up 1.25% trading between 0.01053 and 0.01071. Gold is up 0.13% trading between $1,257 and $1,272USD/oz, silver is up 0.34% trading between $17.18 and $17.66USD/oz, while oil is down 5.2%, trading between $49.97 and $52.54.

Sources: Reuters, Bloomberg, FXStreet, RBC Capital Markets, Bank of Canada, U.S. Federal Reserve, CNBC, Forexlive