Home Fundamental Comment USDCAD ticks down after upbeat Canada manufacturing sales
USDCAD ticks down after upbeat Canada manufacturing sales

USDCAD ticks down after upbeat Canada manufacturing sales

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USDCAD ticks down after upbeat Canada manufacturing sales fxcommentThe Canadian dollar ticked down versus the green currency after a report showing Canada’s manufacturing sales rose more than forecasts in March.

Canadian factory sales rose 2.9 percent in March, following a 1.7 percent drop in February, beating analysts’ forecasts of 1.2 percent increase.

Meanwhile, analysts predict there will be no other interest rate cut by the Bank of Canada this year, with the improvement in the job market and recovery in oil prices.

On the other hand, the recent economic reports from the world’s biggest economy have raised doubts the Fed would raise its borrowing cost this summer.

U.S. retail sales were unchanged in April from an upwardly revised of 1.1 percent in March, raising concerns the weak economic growth pace would continue in the second quarter.

The uncertainty about the timing of the Fed’s rate hike has triggered a sell off in the dollar, sending it to 1.1917 versus the loonie after hitting a peak of 1.2830 on March 18.

The USDCAD retreated from a high of 1.2043 following the release of the buoyant manufacturing sales data.

As depicted on the daily chart, the pair found some support to rebound for a second straight session on Friday, but the rebound will probably face resistance as it approaches the resistance line.

The pair is still trading above the physiological level of 1.20, but the bearish direction seems closer but a breakout to the support area shown on the chart is needed.

Later in the day, investors will track a U.S. consumer sentiment report for May, as they aim to get indications about the health of the economy in the second quarter.

USDCAD fxcomment

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Ahmed Mamdouh Ahmed Mamdouh, Co-Founder and Head of English Fundamental Analysis at FXComment.com, with 7 years of experience in the financial markets. Mamdouh holds a Master’s Degree in Economics from The American University in Cairo and a Bachelor Degree in Economics from The Faculty of Economics and Political Science, Cairo University.

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