The Canadian dollar sailed a volatile trading day with little data on Canada to support the currency. US economic indicators were in line with expectations fundamental good orders for durable goods rose 0.4 percent and orders, including transport were 3.4 percent higher, but the database is more telling because it transportations removes volatile items and is a better indicator of buying trends.
yesterday's announcement by the Bank of Canada (BoC) to keep interest rates unchanged at record low of 0.50 percent, more than expected drawdown in US crude stocks boosted the Canadian dollar against the US dollar even as the release of minutes from the Federal Open market Committee in April (FOMC) have higher rates in June on the table to surprise the market after incarceration statements not of the Fed earlier in 2016 .
lack of impressive data publication to validate more market for a higher probability of a rate hike gave the opportunity to the DAC to move the price of oil was fueled by supply disruptions such as those in Alberta, Nigeria and France.
The USD / CAD has lost 0.7 percent in the past 24 hours. The pair is trading at 1.2993 after breaking the 1.30 level price after the dollar received a boost in oil prices which had Brent to $ 50 just to ward recover some of those gains as the trading session progressed . oil-related currencies had a chance to advance against the USD as economic data from the US was in line with expectations and there were no indications pointing to an interest rate funds Fed in the June Federal Open Market Committee (FOMC).
West Texas was up 0.96 percent over the past 24 hours. Crude prices hit $ 50 as supply disruptions took the spotlight away from oversupply concerns. Nigeria, Libya, Canada and France suffer different type of disruption to their production, but for all he is deemed a temporary setback. Alberta is waiting to restart production after wildfires allow oil sands projects to run. The greatest risk of higher energy prices is that it could trigger shale operators in North America to come back online, with the oversupply in the forefront again with the Organization petroleum exporting countries (OPEC) members, except Venezuela pumping at record levels in a market share battle between them and other producers such as Russia.
rising crude is a mixed blessing for the Canadian economy. On one hand, the rapid rise in 2016 did not offset the fall in 2015, leaving Canadian energy projects are still waiting for higher prices to justify restarting production. The energy boost to CAD also hurts competitiveness, although a weaker currency did not immediately helped reduce the trade balance. There have been improvements in the services sector, but the hole left by the manufacturing was not filled fast enough for the plane of the central bank to diversify away from natural resources.
The end of the week will bring little data to digest traders. The second estimate of US GDP will be released at 08:30, but being the second version means it will not be as significant as it is mainly an update of 0.5 percent of GDP published April 28 that disappointed. Forecasts for the second estimate calls for a 0.8 percent gain in the first quarter. The Fed has maintained this is a transitory slowdown after the macro headwinds in January. The US economy expanded 1.4 percent in the fourth quarter of 2015 so that the sudden drop is the fact that the Fed changes its air December after hiking the interest rate. Economic releases have improved in the US and Fed comments in the minutes of the April FOMC. Fed President Janet Yellen will speak at the Harvard Radcliffe Day later in the day. Given the context, it would be a surprise if President Yellen offer any surprising idea in the upward trajectory of Fed rate, while accepting the Radcliffe Medal for his transformative impact on the less formal society, but given the pro rate speak up mainly of members of the Fed in the past week, it could continue the trend to favor a move in June
CAD events to watch this week :.
Friday, May 27
8:30 USD Prelim GDP q / q
1:15 p.m. USD Fed President Yellen Speaks
* All times EDT
for a full list of events planned in the foreign exchange market check the economic calendar MarketPulse
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