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17 Sep 2013
Solid data adds to Canadian Dollar gains, but Fed could put CAD/USD under pressure
FXstreet.com (London) - The Canadian dollar added to its gains today on indications of strengthening economic activity.
Factory sales figures reported by Statistics Canada exceeded expectations, climbing 1.7 percent to CAD49.5 bn, outstripping the consensus of 0.5 percent. The Canadian statistics office also revised upwards the previous two months’ figures. The latest print represents a five-month high.
The data pushed the Loonie past the USD0.9700 level and towards a second day of gains against the US Dollar. The Canadian Dollar gained yesterday on news that Larry Summers had removed himself from the race to succeed Ben Bernanke as Fed Chairman at the end of his term. His replacement as favourite in the race by Janet Yellen saw the dollar slide. HShe is perceived as the more dovish candidate, and her emergence as the front-runner has been seen as increasing the likelihood that the Fed will be slower to taper its open-ended quantitative easing programme.
Hawks could peck away CAD/USD gains
Any CAD/USD gains could be at risk tomorrow, when the Fed wraps up its two-day FOMC meeting. It is expected that the Fed will announce that it intends to cut $10bn from its monthly asset purchases. However, any unexpectedly hawkish increases in this figure will put CAD/USD under heavy pressure, as relative fiscal tightening attracts dollar bulls.
Factory sales figures reported by Statistics Canada exceeded expectations, climbing 1.7 percent to CAD49.5 bn, outstripping the consensus of 0.5 percent. The Canadian statistics office also revised upwards the previous two months’ figures. The latest print represents a five-month high.
The data pushed the Loonie past the USD0.9700 level and towards a second day of gains against the US Dollar. The Canadian Dollar gained yesterday on news that Larry Summers had removed himself from the race to succeed Ben Bernanke as Fed Chairman at the end of his term. His replacement as favourite in the race by Janet Yellen saw the dollar slide. HShe is perceived as the more dovish candidate, and her emergence as the front-runner has been seen as increasing the likelihood that the Fed will be slower to taper its open-ended quantitative easing programme.
Hawks could peck away CAD/USD gains
Any CAD/USD gains could be at risk tomorrow, when the Fed wraps up its two-day FOMC meeting. It is expected that the Fed will announce that it intends to cut $10bn from its monthly asset purchases. However, any unexpectedly hawkish increases in this figure will put CAD/USD under heavy pressure, as relative fiscal tightening attracts dollar bulls.