USD/CAD keeps 1.2900 on US, CA data
- The pair comes under pressure near the 1.2900 handle.
- US trade deficit widened in January to $56.6 billion.
- CA trade deficit shrunk more than forecasted, BoC next on tap.
The greenback is trimming part of the initial gains vs. its Canadian neighbour on Wednesday and is now prompting USD/CAD to recede to the 1.2900 level and below.
USD/CAD all the attention to the BoC
The pair keeps the upbeat mood today although it has given away part of the earlier advance to fresh daily tops in the 1.2960/65 band.
CA remains offered despite the Canadian trade deficit narrowed more than expected in January to $1.91 billion, while its American peer widened to $56.6 billion during the same period.
Adding to the US docket, the ADP report surprised to the upside, showing the US private sector added 235K jobs vs. 195K initially forecasted. The ADP figures added some optimism ahead of Friday’s non-farm payrolls, although the centre of the debate will be around wage growth.
In the meantime, US-CA yield spreads, especially in the shorter-end of the curve, continue to favour the buck and it have been a relevant driver in the pair’s up move to the psychological handle at 1.3000 the figure (Monday), area last visited in late June 2017.
Ahead in the session, the BoC is expected to keep rates on hold although it is seen delivering a somewhat dovish message. In the US, the Fed’s Beige Book is next on tap.
USD/CAD significant levels
As of writing the index is gaining 0.26% at 1.2910 facing the initial hurdle at 1.3001 (2018 high Mar.5) followed by 1.3132 (61.8% Fibo of the 2017 drop) and finally 1.3349 (high Jun.21 2017). On the other hand, a breakdown of 1.2810 (10-day sma) would open the door to 1.2755 (38.2% Fibo of the 2017 drop) and then 1.2677 (200-day sma).