Forex Pros – The U.S. dollar was almost unchanged against its Canadian counterpart at the close of trade on Friday, at the end of a volatile week as markets were roiled by fears that Greece was moving closer to a default.
USD/CAD hit 0.9897 on Thursday, the pair’s highest since March 17; the pair subsequently consolidated at 0.9792 by close of trade on Friday, inching up just 0.02% on the week.
The pair is likely to find support at 0.9669, Wednesday’s low and a two-week low and resistance at 0.9868, Friday’s high.
The Canadian dollar strengthened on Friday, amid hopes for a solution on an aid package for Greece, after German Chancellor Angela Merkel dropped demands that bondholders should share the burden of a new bailout package.
But risk aversion remained elevated after ratings agency Moody’s said it was putting Italy’s sovereign rating under review, pending a possible downgrade.
Earlier in the day, the Canadian dollar slid against the greenback after U.S. data showed that manufacturing in the Philadelphia region unexpectedly shrank this month, reinforcing expectations that the Federal Reserve will not tighten monetary policy for some time to come.
Meanwhile, crude oil fell to a four-month low on Friday, pressured lower by fears that the Greek debt crisis and sluggish U.S. economic growth will slow oil-demand growth.
Crude oil for delivery in July was down 2.01% on the New York Mercantile Exchange, to trade at USD93.00 a barrel, by close of trade on Friday.
Raw materials, including oil account for about half of Canada’s export revenue.
Elsewhere, Statistics Canada said Thursday that foreign investors bought a net CAD8.22 billion of Canadian securities in April, the most since January. Investments in corporate bonds and government money market paper led the purchases.
In the week ahead, the Federal Reserve is to hold its policy setting meeting, which will be followed by a closely watched press conference by Fed Chairman Ben Bernanke. Investors are hoping that Bernanke will shed some light on the banks view of the need for further monetary easing.
Elsewhere, Canada is to publish official data on retail sales, while the Governor of the Bank of Canada Mark Carney is to speak.
Ahead of the coming week, Forex Pros has compiled a list of these and other significant events likely to affect the markets.
Monday, June 20
Bank of Canada Governor Mark Carney is to speak; his comments will be closely watched for clues to the future possible direction of monetary policy.
Tuesday, June 21
Canada is to publish official data on retail sales, the primary gauge of consumer spending, which accounts for the majority of overall economic activity. The country is also to publish an index of leading economic indicators.
Meanwhile, the U.S. is to release a report on existing home sales, a leading indicator of economic health.
Wednesday, June 22
The Federal Reserve is to announce its federal funds rate. The announcement will be followed with a press conference by Fed Chairman Ben Bernanke to discuss the bank’s rate statement.
Thursday, June 23
The U.S. is to publish government data on initial jobless claims, as well as official data on new home sales, both leading indicators of economic health.
Friday, June 24
The U.S. is to round up the week with official data on durable goods orders, a leading indicator of production, as well revised data on first quarter gross domestic product, the broadest measure of economic activity and the primary gauge of the economy’s health.
ForexPros.com
