USD/CAD hit 1.0135 on Friday, the pair’s lowest since May 14; the pair subsequently consolidated at 1.0166, 0.18% higher for the day, trimming the week’s losses to 0.49%.
The pair is likely to find support at 1.0088, the low of May 14 and resistance at 1.0224, Thursday’s high.
Statistics Canada said manufacturing sales fell 2.4% in April, the largest monthly drop since August 2009, and weaker than expectations for a 0.3% rise.
The report came one day after the Bank of Canada’s financial system review warned that risks to the economy from record high levels of household debt and the housing market remained "elevated", but added that the situation appears to have improved over the past six months.
The greenback fell to five week lows against the Canadian dollar on Thursday amid growing expectations that the Federal Reserve will begin to taper its USD85 billion-a-month bond purchasing program later this year.
A series of weaker-than-expected U.S. economic data releases on Friday raised concerns over the outlook for the economic recovery ahead of this week’s upcoming Federal Reserve policy meeting.
Data showed that the University of Michigan’s consumer sentiment index fell unexpectedly in the current month after rising to the highest level in almost six years in May.
Separate reports showed that U.S. industrial production was flat in May, while the capacity utilization rate fell unexpectedly last month.
In the coming week, markets will be focusing on Wednesday’s Federal Reserve policy meeting, as investors look to Fed Chairman Ben Bernanke for any indication on when the U.S. central bank may start to unwind its easing policies.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, June 17
Canada is to produce government data on foreign securities purchases.
The U.S. is to publish the Empire state manufacturing index.
Also Monday, finance ministers and central bankers from the G8 group are to hold the first day of a two day summit in Northern Ireland.
Tuesday, June 18
The U.S. is to release official data on building permits, housing starts and consumer price inflation.
Meanwhile, finance ministers and central bankers from the G8 group are to hold the second day of a two day summit in Northern Ireland.
Wednesday, June 19
Canada is to release official data on wholesale sales, a leading indicator of consumer spending.
Meanwhile, BoC Governor Stephen Poloz is to give his first speech since taking over the post.
Later Wednesday, the Federal Reserve is to announce its federal funds rate and publish its rate statement. The statement is to be followed by a closely watched press conference with Chairman Ben Bernanke. The U.S. central bank is also to release its quarterly report on economic and inflation projections.
Thursday, June 20
The U.S. is to release the weekly government report on initial jobless claims, in addition to data on existing home sales and the Philly Fed manufacturing index.
Friday, June 21
Canada is to round up the week with official data on consumer inflation and retail sales.
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