On Wednesday, August 24, 2016, the dollar inched higher with the concentration on Fed chief Yellen’s speech Friday. The dollar index increased 0.08% at 04:00 ET. The dollar increase 0.06% to 100.31 yen.
Members of the Fed Up Coalition are planned to meet later this week with Fed officials, together with the Federal Reserve Bank of Kansas City President Esther George, at the central bank’s annual policy symposium in Jackson Hole, Wyo.
Investors perceive Yellen adopting a hawkish tone in her speech on Friday at a Fed symposium.
On Sunday, Deputy Fed chair Stanley Fischer was positive regarding U.S. economy.
U.S. new home sales figures for July presented the biggest increase in nine years.
At this time, the USD/CAD pair increases 0.10% to 1.2925, having previously announced session peak at 1.2933. USD/CAD takes a breather and merges the overnight gain, reinforced by renewed weakness in the oil prices, which reduces the sentient around the resource linked to the Canadian dollar. Oil prices continued to drop while gold traded flat.
Furthermore, the extended recovery showed by the greenback against its major contemporaries, also improves to the positive tone behind the USD/CAD pair. The US greenback index increases 0.10% higher at 94.60, playing with session tops reached at 94.63.
However, on Tuesday, the dollar destabilized across the board, as investors change their focus away from hawkish statements on U.S. interest rates by Fedl Reserve officials and in the direction of Fed Chair Janet Yellen speech on Friday.
Although, the greenback was given an increase over the weekend when Vice Chairman Stanley Fischer stated that the Fed was getting near to its job and inflation goals, encouraging the assumption that a rate hike could happen immediately in September.
Focus now turns in the direction of the US existing home sales and Energy Information Administration weekly supply report for further momentum on the major.
On August 23, 2016, data from Statistics Canada presented that Canadian retail sales inched down 0.1% to C$44.1 billion in June. This was in contrast with anticipation for 0.5% progress, after the 0.2% increase the previous month.
As of this writing, the USD/CAD is trading beyond 1.29, after the US greenback succeeded to recover some of its losses as the Crude Oil Prices increase delayed..
Core retail sales decline 0.8% on the month, retreating 0.8% increase registered in May. A forecast of 0.3 percent increase from economist.
The Canadian dollar has been struggling since last Friday’s poor fundamental release with data emphasizing some sluggish economic performance in Canada. With a slight data schedule to be posted from Canada this week.
What to expect?
The market will turn to the price of oil and U.S. data for direction on the pairing of USD/CAD. U.S. data will be heavy on Thursday and Friday which should flare up in volatility.
US greenback traders might restrain from fully compelling before Fed Chair Yellen speech this coming Friday, which could suggest that the US housing data may have serious influence unless an important irregularity from expectations hits the wires.
However, the possibility of a Fed rate hike in December is gradually edging higher, which could hypothetically see the US Dollar strengthen on pre-positioning to the main event on Friday.
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