Forex Pros - Last week saw the Canadian dollar hit its highest level against its U.S. counterpart since 2007 as crude oil, the country's biggest export, hit a 29-month high before trimming gains after Friday's devastating earthquake in Japan.
USD/CAD hit 0.9667 on Tuesday, the pair's lowest since mid-November 2007; the pair subsequently consolidated at 0.9728 by close of trade on Friday, unchanged over the week.
The pair is likely to find support at 0.9667, Tuesday's low and resistance at 0.9788, the high of February 28.
The Canadian dollar trimmed gains on Friday as crude oil fell below USD100 a barrel, after an 8.9-magnitude earthquake followed by a tsunami devastated Japan's northern coast. Japan is the world's third-largest consumer of the commodity.
On Monday, crude for April delivery touched USD106.95 a barrel in New York, the highest level since September 26, 2008, amid concern turmoil in Libya and the Mideast would disrupt supplies.
The loonie was also pressured lower after official data showed that U.S. retail sales rose by the most in four months in February. The Commerce Department said U.S. retail sales rose 1%, in line with expectations, following an upwardly revised 0.7% increase in January.
Meanwhile, government data showed that Canadian employers added a net 15,100 jobs in February, after a gain of 69,200 the previous month, trailing expectations for a 25,000 increase. The unemployment rate stayed at 7.8%.
Data on Thursday showed that Canada's trade surplus narrowed more-than-expected in January, underlining the Bank of Canada's view that the loonie's strength may be acting as a damper on economic growth.
Next week, the main market focus looks set to be on the Federal Reserve's policy setting meeting on Tuesday. Also next week, Canada is to publish official data on inflation.
Ahead of the coming week, Forex Pros has compiled a list of these and other significant events likely to affect the markets.
Monday, March 14
Canada is to publish a government report on the capacity utilization rate, an important indicator of consumer inflation.
Tuesday, March 15
The U.S. is to publish official data on manufacturing activity in New York state, as well as government reports on import prices and the balance of domestic and foreign investment. In addition, the Federal Reserve is to hold its policy setting meeting before announcing its federal funds rate. The banks rate statement will be closely watched as it discusses the economic outlook and offers clues on the outcome of future votes.
Also Tuesday, Canada is to publish official data on labor productivity and new motor vehicle sales.
Wednesday, March 16
The U.S. is to publish a flurry of government data, with reports on building permits, an excellent gauge of future construction activity, as well as data on producer price inflation, housing starts and crude oil stockpiles. Meanwhile, Canada is to release official data on manufacturing sales, a leading indicator of economic health.
Thursday, March 17
The U.S. is to publish official data on initial jobless claims, the nation's earliest employment data. The country is also to publish government data on consumer price inflation, industrial production and the capacity utilization rate. Meanwhile, the Federal Reserve Bank of Philadelphia is to publish an index of manufacturing activity, a leading indicator of economic health.
In addition, Canada is to publish official data on foreign securities purchases and wholesale sales, a leading indicator of consumer spending.
Friday, March 18
Canada is to round up the week with government data on consumer price inflation, which accounts for a majority of overall inflation.