By FX Empire.com
The USD/CAD pair extended its gains on Wednesday, as fears persisted around global markets over the outlook of the European debt crisis, as yields on European bonds continued to rise, despite the ECB effort to ease tensions by purchasing Italian, Spanish, and Portuguese bonds.
Meanwhile, inflationary figures from the United States signaled price pressures eased in October, where the CPI declined by 0.1% in October below forecasts, while Core CPI rose by 0.1% in line with forecasts. Meanwhile, the better than expected expansion in U.S. industrial production failed to restore confidence in markets, as traders remained focused on European debt crisis.
Traders continued to target lower yielding assets, which provided the U.S. dollar with more bullish momentum to extend its gains against the Loonie, which pushed the USD/CAD pair to the upside.
Traders will continue to monitor the developments from Europe regarding the debt crisis, where rising yields inEuropesuggest investors are concerned amid the uncertainty that is surrounding the outlook of the EU debt crisis. Moreover, traders will be eyeing data from theU.S.housing market represented by the housing starts and building permits, in addition to the weekly jobless claims, and the Philadelphia Fed index. The USD/CAD pair should still be able to rise if concerns fromEuropecontinue to dominate global markets, but we still expect volatility to continue to dominate trading, and that should also lead to high levels of fluctuations for the USD/CAD pair.
Thursday November 17:
The U.S. data will start at 13:30 GMT with the housing starts for October which is expected to drop to 610 thousand from 658 thousand and Building Permits on the other hand to rise to 600 thousand from 594 thousand.
At the same time we have the weekly jobless claims for the week ending November 11 after last week they unexpectedly declined to 390 thousand.
The data will end with the Philadelphia Fed Index for November at 15:00 GMT which is expected to improve to 10.0 from 8.7.
Originally posted here
