The Canadian dollar depreciated on Wednesday versus the US dollar. The publication of the Federal Open Market Committee (FOMC) meeting two weeks after the Fed announced it was hiking rates gave the dollar some breathing room and helped the greenback recover from some of the weekly losses versus other major pairs.
Oil prices fell more than 4 percent ahead of the release of US crude inventories tomorrow at 11:00 am EDT. The price of energy had
The Canadian economic calendar was light on Wednesday with traders looking ahead to tomorrow’s trade balance and building permits both to be released at 8:30 am EDT. The Canadian indicators could get lost in the shuffle with the start of the US employment data deluge. The ADP non-farm report at 8:15 am EDT and unemployment claims at 8:30 am EDT.
The USD/CAD gained 0.264 percent in the last 24 hours. The currency pair is trading at 1.2972 after the Fed meeting minutes highlighted the central bank’s commitment to
The Fed FOMC minutes did not shed any new light on the topics under discussion within the central bank. Fed speakers have been divided on the issues of inflation and the interest rate hike path which were highlighted in the notes from the last monetary policy meeting. The vote on that meeting was for the second rate hike in 2017. There is also now more details on the Fed’s plans for its reduction of the balance sheet it accumulated during the lifespan of the quantitative easing program. The only question mark that remains is when will it start to shrink. The takeaway from the FOMC minutes is “within months” which leaves both the September and December FOMC meetings as heavy candidates. If the Fed decides to hike rates for a final time in 2017 it could decide either to split the announcements between the two meetings with September being the kickoff of balance sheet reduction and December reserved for a rate hike announcement.
CAD traders will be on the lookout for employment releases out of the US as the dollar found little support from the Fed minutes, but could turn around if the inflation component of the private and public job reports show signs of wage growth. Canadian jobs are expected to have risen by more than 11,000 positions following the massive gain of 54,500 last month and could support the CAD against the USD ahead of the Bank of Canada (BoC) monetary policy meeting on July 12.
Oil dropped 4.226 percent on Wednesday. The price of West Texas Intermediate is trading at $44.94 ahead of Thursday’s release of crude inventory data. The price of oil has been caught between the OPEC cut agreement and ramping production from other producers. Russia signed on to the OPEC deal but according to some
The weekly API oil inventories showed a large drawdown of 5.8 million barrels of crude and –5.7 million barrels of gasoline with a small buildup of 0.4 in distillates giving a late Wednesday session boost to crude ahead of the government’s official data to be released tomorrow at 11:00 am EDT.
Market events to watch this week:
Thursday, July 6
8:15 am USD ADP Non-Farm Employment Change
8:30 am CAD Trade Balance
8:30 am USD Unemployment Claims
10:00 am USD ISM Non-Manufacturing PMI
11:00 am USD Crude Oil Inventories
Friday, July 7
4:30 am GBP Manufacturing Production m/m
8:30 am CAD Employment Change
8:30 am CAD Unemployment Rate
8:30 am USD Average Hourly Earnings m/m
8:30 am USD Non-Farm Employment Change
*All times EDT
For a complete list of scheduled events in the forex market visit the MarketPulse Economic Calendar
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