Shutterstock photo

Forex - USD/CAD weekly outlook: July 8 - 12

Shutterstock photo

Shutterstock photo - The U.S. dollar rose to 21-month highs against the Canadian dollar on Friday as stronger-than-expected U.S. nonfarm payrolls data for June reinforced expectations that the Federal Reserve will start to taper asset purchases this year.

USD/CAD rose to highs of 1.0609, the highest since early October 2011, before trimming gains to settle at 1.0573, up 0.55% for the day and gaining 0.48% for the week.

The pair is likely to find support at 1.0510, Friday's low and resistance at 1.0650.

The Department of Labor said the U.S. economy added 195,000 jobs in June, more than the 165,000 increase forecast by economists. May's figure was revised up to 195,000 from a previously reported 175,000. The unemployment rate remained unchanged at 7.6% in June.

Fed Chairman Ben Bernanke said last month the bank could begin tapering its USD85 billion-a-month asset purchase program by the end of 2013 and wind it down completely by the middle of 2014 if the economy picks up as the central bank expects.

The greenback was also boosted by expectations that other world central banks will continue to maintain loose monetary policy.

On Thursday the European Central Bank and the Bank of England indicated that interest rates will remain low for an extended period to help spur growth, while the weakening trend of the yen looked likely to remain intact after the Bank of Japan unveiled a massive monetary easing program in April.

In Canada, official data on Friday showed that the economy lost 300 jobs in June, compared to forecasts for a decline of 3,000, while the unemployment rate remained unchanged at 7.1%.

In the week ahead, investors will be looking ahead to Wednesday's minutes of the Federal Reserve's June meeting, as well as Friday's closely watched data on U.S. consumer sentiment.

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

Monday, July 8

Canada is to publish government data on building permits, a leading indicator of future construction activity. The Bank of Canada is to release its quarterly business outlook survey.

Wednesday, July 10

The Federal Reserve is to publish the minutes of its June policy setting meeting. Meanwhile, Fed Chairman Ben Bernanke is to speak.

Thursday, July 11

Canada is to release official data on new house price inflation, an important indicator of demand in the housing sector.

The U.S. is to release the weekly government report on initial jobless claims, a leading economic indicator, as well as official data on import prices.

Friday, July 12

The U.S. is to round up the week with official data on producer price inflation and preliminary data from the University of Michigan on consumer sentiment. - offers an extensive set of professional tools for the Forex, Commodities, Futures and the Stock Market including real-time data streaming, a comprehensive economic calendar, as well as financial news and technical & fundamental analysis by in-house experts.

Read more News on or Follow us on Twitter at @ Newsinvesting

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.

Other Topics