Dec 01, 2023

Canadian employment and US manufacturing data will dominate the Friday trade in USDCAD.

USDCAD-Daily-Chart

USDCAD – Daily Chart

USDCAD traded near 1.3577 on Thursday and is looking for a price bottom.  

Traders can play the USDCAD in the week ahead, and Friday’s data will determine the direction. 

With a price floor in play, the US dollar will look for support, and there is also a speech planned from Federal Reserve Chair Jerome Powell. 

Stocks received a boost in the week, and the US currency weakened after another Fed official, Chris Waller, hinted at a top in interest rates. Waller has been one of the more hawkish board members but said he was “increasingly confident” that the Fed’s interest rate policies will bring inflation back to the central bank’s 2% target level. 

Waller’s remarks came after Powell’s cautious comments earlier this month when he said “we are not confident” that the rate was high enough. Waller, moved by recent inflation data, noted that current hiring, consumer spending, and business investment data suggested that economic growth was cooling.  

Last month’s figures “are consistent with the kind of moderating demand and easing price pressure that will help move inflation back to 2%, and I will be looking to see that confirmed in upcoming data releases,” Waller said. 

Traders can get ahead of the data on Friday due to Thursday’s release of Canadian growth numbers and US PCE inflation. That will set the tone for the Friday session and the week ahead. Traders expect the Canadian growth and US manufacturing to be strong. They also expect Canada’s hiring and US inflation to slow. 

Any deviation from those trends could confirm a USDCAD price low or a continuation to lower levels.

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