- January 8, 2018
- Posted by: Joey Benedid
- Category: Market News
With markets back to full participation after the holidays the U.S. dollar is marginally stronger against the G7 bloc from our close on Friday as we head into a week that has only a few major economic data points scheduled for release. UK manufacturing data is out on Wednesday while Australian retail sales numbers come out Thursday. The market’s full attention will be focused on Thursday’s Producer Pricing Index, a leading indicator of consumer inflation, along with Friday’s Consumer Pricing Index retail sales data.
The Canadian dollar remains well supported after Friday’s spectacular & unexpected employment data pushed us to 1.2359. We have pulled back to the sell zone of 1.2420-40 and await this morning’s Bank of Canada Business Outlook Survey. It would be folly to think the Bank will not paint a rosy picture for our economy so the only question remaining is will they raise rates on January 17? Most of the major Canadian banks have hopped on the rate hike bandwagon since Friday’s data release so expect CAD strength to remain until next Wednesday at the very least. Downside targets are now 1.2240 and 1.2020 while resistance is seen at 1.2440 and 1.2485.