Forexpros - Last week saw the U.S. dollar drop sharply against its Canadian counterpart on Friday, as the greenback came under pressure after Federal Reserve Chairman Ben Bernanke said the central bank was ready to provide more support to a weak U.S. economy.
USD/CAD hit 0.9790 on Thursday, the lowest since August 25; the pair subsequently consolidated at 0.9811 by close of trade on Friday, slumping 0.92% on the week, the first weekly decline since mid-July.
The pair is likely to find support at 0.9774, the low of August 17 and resistance at 0.9968, the high of August 11.
In a highly-anticipated speech at the Fed's annual retreat in Jackson Hole, Wyoming, Chairman Bernanke said the central bank remained prepared to implement fresh measures to stimulate the faltering U.S. economy, but stopped short of outlining when and if this may happen.
"The Committee will continue to assess the economic outlook in light of incoming information and is prepared to employ its tools as appropriate to promote a stronger economic recovery," Bernanke said.
Bernanke announced that the central bank's September policy-setting meeting would run for two days instead of one, in order to "allow a fuller discussion" of the economic outlook.
Also Friday, the Commerce Department said that the U.S. economy grew 1% in the second quarter, disappointing expectations for an expansion of 1.1% and slower than an initial estimate of 1.3%.
The loonie was also boosted as crude oil, Canada's largest export, posted its first weekly gain since late June last week, climbing 3.75% on the New York Mercantile Exchange to trade at USD85.47 a barrel by close of trade on Friday.
Raw materials, including oil account for about half of Canada's export revenue.
Looking ahead to the coming week, investors will be focusing on Friday's release of U.S. data on non-farm payrolls in order to gauge the strength of the U.S. economic recovery.
Also next week, the U.S. Institute of Supply Management is to publish its index of manufacturing activity for August, while Canada is to publish official data on second quarter gross domestic product.
Ahead of the coming week, Forex Pros has compiled a list of these and other significant events likely to affect the markets.
Monday, August 29
The U.S. is to produce industry data on pending home sales, a leading indicator of health in the housing market. The nation is also to release official data on personal income and expenditure and consumer prices.
Tuesday, August 30
Canada is to release official data on the nation's current account, as well as reports on raw material price inflation, an important signal of overall inflation.
Meanwhile, the U.S. is to release data on consumer confidence, a leading indicator of consumer spending, as well as an industry report on house price inflation. In addition, the Federal Reserve's Open Market Committee is to publish the minutes of its most recent policy setting meeting.
Wednesday, August 31
Canada is to publish official data on GDP, an all-inclusive measure of economic activity and the most important indicator of economic growth.
In the U.S., payroll processing firm ADP is to release a report on non-farm payrolls, which leads government data by two days. The U.S. is also to publish data on manufacturing activity in the Chicago area, factory orders and crude oil stockpiles.
The U.S. crude supplies report can be a big market mover for the Canadian dollar, due to the size of Canada's energy sector.
Thursday, September 1
The U.S. is to publish its closely watched weekly report on initial jobless claims, while the ISM is to produce data on manufacturing sector growth.
Friday, September 2
The U.S. is to round up the week with a government report on private sector job creation, a key indicator of overall economic health. The country is also to publish official data on the unemployment rate and average hourly earnings, an important inflationary indicator.