The USD/CAD pair fell on Wednesday, as rising optimism in markets spurred demand for higher yielding assets, which provided the Canadian dollar with strong momentum and pushed the USD/CAD pair to the downside, where traders were feeling optimistic after Italy announced new austerity measures that eased concerns from the European debt crisis. Moreover, news emerged that President Obama will announce a $300 billion job stimulus plan on Thursday, which also supported confidence in markets.
Moreover, the Bank of Canada left the benchmark interest rates unchanged at 1.00% and signaled that price pressures were easing, while also highlighting the strength of the Canadian dollar as the major downside risk for growth.
U.S. President Obama will announce a new stimulus plan to support the labor market, where the specific details of Obama’s plan will be released before the Congress on Thursday. Moreover, traders will be watching closely rate decisions from Europe, where the Bank of England and the European Central Bank are expected to leave interest rates unchanged.
Thursday September 08:
At 12:30 GMT, Canada will release the building permits for July, where building permits are expected to drop by 1.5%, compared with the prior rise of 2.1%.
At 12:30 GMT, Canada will also released the international merchandise trade for July, where the trade deficit is expected to narrow to 1.0 billion CAD, compared with the prior deficit of 1.56 CAD.
At 12:30 GMT, the U.S. will release the trade balance for July, where the trade deficit is expected to narrow to $51.0 billion, compared with the prior deficit of $53.1 billion.
At 12:30 GMT, the U.S. will also release the jobless claims for the week ending September 3, where jobless are expected to ease to 405K from 409K.
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