Forex Pros - The week ending February 25 saw the Canadian dollar climb to its highest level in almost three years against its U.S. counterpart, as crude oil, Canada's largest export, rallied to a 29-month high.
USD/CAD hit 0.977 on Friday, the pair's lowest since March 7, 2008; the pair subsequently consolidated at 0.9787 by close of trade, shedding 0.66% over the week.
The pair is likely to find support at 0.9709, the low of February 28, 2008 and resistance at 0.9900, last Thursday's high.
Crude oil for April delivery in New York climbed to its highest level since September 2008 on Thursday; topping USD103 a barrel as ongoing violence in Libya stoked fears that supplies could be disrupted.
It later eased back to USD97.28 a barrel after Saudi Arabia, the U.S. and the International Energy Agency said they could compensate for a supply disruption.
The loonie trimmed gains slightly on Friday after revised data showed that fourth-quarter U.S. gross domestic product came in weaker-than-expected. The Commerce Department said GDP rose at an inflation-adjusted annual rate of 2.8%, less than the expected 3.3% gain. The U.S. is Canada's largest trading partner.
In the week ahead, any further escalation of geopolitical tensions in North Africa and the Middle East could continue to weigh on market sentiment while U.S. jobs data for February, due on Friday, will also be a major focus for markets.
Also next week, Canada is to publish data on fourth quarter GDP while the Bank of Canada is to announce its overnight rate.
Ahead of the coming week, Forex Pros has compiled a list of these and other significant events likely to affect the markets.
Monday, February 28
The U.S. is to kick off the week by releasing a flurry of data, with industry data on pending home sales as well as a report on manufacturing activity in the in the Chicago area. The U.S. is also to publish official data on personal consumption expenditure and consumer price inflation.
Also Monday, Canada is to publish official data on GDP, the broadest measure of economic activity and the primary gauge of the economy's health, as well as a report on the country's current account.
Tuesday, March 1
In the U.S., the Chairman of the Federal Reserve, Ben Bernanke, is to testify on the semi-annual monetary policy report before the Senate Banking Committee, in Washington. His comments will be closely scrutinized for clues to the future possible direction of monetary policy. Meanwhile, the Institute for Supply Management is to publish a report on manufacturing activity.
Meanwhile, the BOC is to announce its overnight rate. The announcement will be accompanied by the banks rate statement, which contains commentary about the economic conditions that influenced the rate decision. It also discusses the economic outlook and offers clues on the outcome of future decisions.
Wednesday, March 2
In the U.S., Ben Bernanke is to testify for a second day before the Senate Banking Committee. Meanwhile, the Fed is to publish its Beige Book, which contains data policymakers examined before making their interest rate decision.
The country is also to publish data on private sector payrolls compiled by payroll processing firm ADP, which heads up government data by two days, as well as a report on crude oil stockpiles. The crude oil data can be a big market mover for the loonie due to Canada's extensive oil exports.
In addition, Canada is to publish its raw materials price index, a leading indicator of consumer price inflation.
Thursday, March 3
The U.S. is to release its key weekly report on initial jobless claims, a leading indicator of overall economic health. The country is also to publish revised data on nonfarm productivity, as well as a report on service sector activity, while Fed chair Ben Bernanke is to speak at a public engagement.
Friday, March 4
The U.S. is to round up the week with a closely watched report on non-farm payrolls, a leading indicator of job creation. The country is also to publish government data on the rate of unemployment, average hourly earnings as well as factory orders.
In Canada, the Richard Ivey School of Business is to publish its PMI, a leading indicator of economic health.
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.