Forex - USD/CAD weekly outlook: February 24 - 28

Shutterstock photo - - The Canadian dollar ended the week lower against the U.S. dollar on Friday, following the release of weaker-than-expected domestic data on retail sales and tame inflation data.

USD/CAD hit 1.1196, the strongest level since January 31 and was last up 0.09% to 1.1108. For the week, the pair advanced 1.40%.

The pair was likely to find support at 1.1059, Thursday's low and resistance at 1.1223, the high of January 31 and a four-and-a-half year high.

The loonie, as the Canadian dollar is also known, hit session lows after Statistics Canada reported that December retail sales tumbled 1.8% from November. Economists had expected a drop of 0.5%.

Canada's dollar retraced some of these losses after a separate report showed that the rate of consumer inflation accelerated by 1.5% in January from a year earlier. This was higher than the 1.3% increase forecast by economists, but remained well below the Bank of Canada's 2% target.

The data indicated that the BoC is likely to keep rates on hold for some time to come.

The U.S. dollar came under pressure after data showed that U.S. existing home sales fell by a larger-than-forecast 5.1% in January, dropping to an 18-month low.

However, investors continued to look past a recent series of disappointing U.S. economic reports, attributing them to severely cold winter weather.

Wednesday's minutes of the Federal Reserve's January meeting showed that officials agreed the current pace of reductions to the bank's asset purchase program would remain unchanged, so long as the economy shows signs of improvement.

Official also discussed when to begin raising interest rates, the minutes said.

The U.S. central bank is currently purchasing $65 billion of assets per month.

Dallas Fed President Richard Fisher said Friday that the central bank should continue to taper its asset-purchase program. Separately, St. Louis Fed President James Bullard said the U.S. economy is headed for a good year of growth and he expects the Fed to continue rolling back its stimulus program.

In the week ahead, U.S. data on durable goods orders and consumer confidence will be in focus, while Canada is to publish its monthly report on economic growth on Friday.

Ahead of the coming week, has compiled a list of these and other significant events likely to affect the markets. The guide skips Monday, as there are no relevant events on this day.

Tuesday, February 25

The U.S. is to release data on consumer confidence and a private sector report on house price inflation.

Wednesday, February 26

The U.S. is to release data on new home sales, a leading indicator of demand in the housing market.

Thursday, February 27

Canada is to produce data on the current account.

The U.S. is to release data on durable goods orders, a leading indicator of production, and the weekly report on initial jobless claims.

Friday, February 28

Canada is to publish the monthly report on GDP growth, the broadest indicator of economic activity and the leading measure of the economy's health.

The U.S. is to round up the week with revised data on fourth quarter growth, a report on manufacturing activity in the Chicago region, revised data on consumer sentiment and private sector data on pending home sales. offers an extensive set of professional tools for the financial markets.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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