USD/CAD at 10-day low ahead of BoC Governor’s speech

Victor Kerezov
  • March 18th, 10:31
  • Last Updated: October 21st, 13:25

**, Tuesday 18 March:**Early in today’s European trading, the USD/CAD fell to a 10-day low of 1.1042, the third time over the past week that the currency pair has tested 1.1046, the 38.2 percent Fibonacci retracement of the decline from 1.1194 to 1.0955. However, the bears have so far failed in their efforts to push the pair closer to the low 1.10s.

The impetus for a more pronounced move lower could well be the address today of Bank of Canada governor Stephen Poloz to the Halifax Chamber of Commerce, scheduled for 15:55 UTC. The market will also pay very close attention to every word in Poloz’s subsequent press conference, where any comment on the future direction of Canadian interest rates may affect the loonie’s short and medium term future.

Canadian Manufacturing Sales for January are due out at 12:30 UTC. The most recent report showed a 0.9 percent drop m/m and analysts are expecting a rebound to 1.1 percent in January.
In the US, the focus today will fall on the Consumer Price Index for February, also due out at 12:30 UTC. Both headline and core consumer prices inched up by 0.1 m/m in January and the markets are anticipating more of the same.

Given the increased significance inflation has lately taken on in the Fed’s forward guidance, some analysts — like Jan Hatzius and Neal Soss, chief economists at Goldman Sachs and Credit Suisse respectively — believe that inflation reports are the new jobs reports.
The US economic calendar today also offers February’s Building Permits, once again at 12:30 UTC.
Right now, the USD/CAD is trading at around 1.1055, down 0.01 percent intraday.

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