The USD/CAD pair rose on Wednesday where falling commodity prices including oil and gold weighed down on the Canadian dollar and pushed the USD/CAD pair to the upside, where despite the general weakness of the U.S. dollar, the CAD was deeply affected by falling commodities.
Moreover, investors feel that slowing economic activities could negatively affect the Canadian economy, where the ADP employment report showed that private employers in the United States added 179,000 jobs only in April, well below the expected 198,000 added jobs and compared with the prior rise of 207,000 added jobs.
The ISM Non-manufacturing (Services) index also eased sharply below expectations in April, where the ISM services index eased to 52.8, compared with median estimates of 57.5 and the prior estimate of 57.3.
Crude oil prices extended the drop after the EIA report showed that crude oil inventories increased by 3.4 million barrels above expectations of 2.0 million barrels.
The USD/CAD pair could still rise given that the strength of the U.S. dollar prevails, nevertheless, any gains for the pair will be limited over the short term, since our medium term outlook is still favoring the USD/CAD pair to drop.
Thursday 12:30, Canada will release the Building Permits index for the month of March, where building permits rose by 9.9 percent in February, and analysts expect building permits to drop by 2.5% in March.
Thursday 12:30, the United States will release the Nonfarm Productivity preliminary estimate for the first quarter of 2011, where Nonfarm productivity is expected to rise by 1.1%, compared with the prior rise of 2.6% in the fourth quarter, as economic growth eased in the first quarter, while Unit Labor Costs are expected to rise by 0.8%, compared with the prior drop of 0.6%.
Thursday 12:30, the United States will release the Jobless Claims for the week ending April 30, where jobless claims rose last week to 429,000, and expectations signal jobless claims will drop to 410,000.
Thursday 14:00, Canada will release the Ivey PMI for the month of April, where Ivey PMI reached 73.2 in March, and expectations suggest the index will ease to 65.2 in April.
Written by ForexMansion.com