By FX Empire.com
The USD/CAD pair extended its gains on Tuesday, as the U.S. dollar gained strong momentum amid the ongoing pessimism that continued to dominate global financial markets, where Greek Prime Minister George Papandreou surprised markets by calling a referendum on the bailout package that was approved last week by EU leaders. Moreover, the failure of MF Global Holdings continued to weigh down on confidence, as traders sold higher yielding assets and targeted lower yielding ones, which provided the U.S. dollar with strong bullish momentum that pushed the USD/CAD pair higher.
Moreover, the Institute for Supply Management released the manufacturing index for the month of October, where the ISM manufacturing index eased to 50.8 from the prior estimate of 51.6 and below median estimates of 52.0, the worse than expected expansion in the manufacturing index also spread jitters across markets over the outlook for growth in the world’s largest economy, and boosted demand for the U.S. dollar against higher yielding currencies.
Traders will be eyeing the FOMC rate decision on Wednesday, where the majority of analysts expect the FOMC to leave the current monetary policy unchanged, although few analysts expect the Fed to announce more monetary easing measures. Also on Wednesday, traders will be eyeing the ADP employment change report for the month of October, since it could provide some hints over the health of the U.S. labor market ahead of Friday’s Non-farm payrolls.
Wednesday November 02:
The United States will join the session at 12:15 GMT with the ADP employment change for October, as employment is expected to increase by 100 thousand jobs from 91 thousand.
At 16:30 GMT the United States will release the FOMC rate decision, with expectations for a steady rate of 0.25%.
At 18:15 GMT, the Fed’s Chairman Ben Bernanke will speak at a Fed Conference to discuss the latest projections and outlook for the U.S. economy.
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