Canadian Dollar pumps brakes against Greenback after soft US sentiment figures

• Canadian Dollar is mostly flat on Friday with limited momentum.
• Housing Starts in Canada since November ticked higher.
• Next week: Canadian CPI inflation, US Fed rate call.

The Canadian Dollar (CAD) was mostly higher on Friday but stuck close to the day’s opening range against the US Dollar (USD) as markets shuffled in place ahead of the weekend. The University of Michigan US Consumer Sentiment Index ticked slightly lower early in the American trading session, and the highest print of Canadian Housing Starts since November sailed by without much notice from investors.

Canada brings February’s Consumer Price Index (CPI) inflation figures next week, slated for Tuesday, and markets will be quickly pivoting to face the latest rate statement from the Federal Reserve (Fed) on Wednesday. The Fed will also be updating its Dot Plot projection of interest rate expectations for the next one to five years.

Next week, the latest US Manufacturing Purchasing Managers Index (PMI) will be released on Thursday, followed by Canadian Retail Sales and the US Services PMI component on Friday. Early median market forecasts expect the US Manufacturing PMI to tick slightly lower, and Canadian Retail Sales are expected to contract.

Daily digest market movers: Data drives little chart movement, investors buckle down for the wait to Fed

• Seasonally-adjusted Canadian Housing Starts for the year ending in February rose to 253.5K, easily clearing the forecast of 230K and the previous period’s 223.2K (revised down from 223.6K).
• Canadian Wholesale Sales in January also recovered to a slim 0.1%, bouncing from the forecast of -0.6%. The previous month’s Wholesale Sales were revised to -0.3% from 0.3%. Next-to-flat prints in the revision-prone indicator are unlikely to drive much investor confidence.
• The University of Michigan’s US Consumer Sentiment Index ticked slightly lower in March down to 76.5 versus the market’s forecast hold at the previous 76.9.
• UoM 5-year Consumer Inflation Expectations in March held steady at 2.9% as US consumers remain skeptical that the Fed will successfully drag inflation below 2%.
• US MoM Industrial Production recovered a slim 0.1% in February, snubbing the market’s forecast of 0.0%, but only slightly. The previous month’s Industrial Production was revised down to -0.5% from the initial print of -0.1%.
• Next Tuesday’s Canadian CPI for the year ended February is expected to increase to 3.1% from the previous 2.9%. The Bank of Canada’s (BoC) Core Consumer Price Index (CPI) last came in at 2.4%.
• Canadian Retail Sales are also forecast to contract, with markets expecting a -0.4% print versus the previous 0.9%.

Technical analysis: Flat Friday trading as Canadian Dollar struggles to pare losses against Greenback

The Canadian Dollar (CAD) was mixed to flat on Friday, staying close to the day’s opening range against the US Dollar, Euro (EUR), and Swiss Franc (CHF). The CAD has climbed around a tenth of a percent against the Pound Sterling (GBP) and is up roughly half a percent against the Japanese Yen (JPY).

Intraday trading in the USD/CAD is stuck on the high side of 1.3500, with the day’s early high near 1.3550 and sellers failing to push the pair back below 1.3510. A near-term supply zone is pricing in a potential pullback floor near 1.3460, and intraday bids are struggling to pierce a support-turned-resistance level near 1.3550.

USD/CAD hourly chart