Investing.com – The Canadian dollar fell to two-week lows against the U.S. dollar on Friday after unexpectedly weak domestic employment data indicated that the country’s central bank will leave rates on hold at its upcoming policy meeting.
USD/CAD advanced 0.77% to 1.0731 late Friday, the highest since June 25.
The pair is likely to find support at 1.0629, Friday’s low and resistance at around the 1.0775 level.
Statistics Canada reported that the economy lost 9,400 jobs last month, compared to expectations for jobs growth of 20,000. The Canadian unemployment rate ticked up to 7.1% from 7.0% in May, against expectations of an unchanged reading.
The poor data fuelled expectations that the Bank of Canada will leave rates unchanged at 1.0% at Wednesday’s meeting and stick to its dovish stance on monetary policy.
The loonie, as the Canadian dollar is also known, had rallied in recent weeks as economic reports indicated that the recovery was improving. The U.S. dollar struck its 2014 low of 1.0619 against the Canadian dollar on July 3.
In the U.S. Wednesday’s minutes of the Federal Reserve’s latest meeting indicated that interest rates are unlikely to rise soon.
The minutes of the central bank’s June meeting showed that officials agreed to end the bank’s asset purchase program in October, but revealed little new information on when rates could start to increase.
Officials said policy depends most “on the evolution of the economic outlook.”
In the week ahead, investors will be watching testimony on monetary policy by Federal Reserve Chair Janet Yellen, while the BoC’s rate statement will also be in focus.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The guide skips Monday as there are no relevant events on this day.
Tuesday, July 15
The U.S. is to release data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity. The U.S. is also to release data on import prices, business inventories and manufacturing activity in the Empire state.
Wednesday, July 16
The BoC is to announce its benchmark interest rate and publish its rate statement, which outlines economic conditions and the factors affecting the monetary policy decision. The bank will hold a press conference following the announcement.
Canada is also to release data on manufacturing sales.
The U.S. is to release reports on producer price inflation and industrial production. Meanwhile, Fed Chair Janet Yellen Carney is to testify on monetary policy to the House financial committee.
Thursday, July 17
Canada is to produce data on foreign securities purchases.
The U.S. to publish reports on initial jobless claims, housing starts, building permits, and the Philly Fed manufacturing index.
Friday, July 18
Canada is to release data on consumer process and wholesale sales.
The U.S. is to round up the week with preliminary data from the University of Michigan on consumer sentiment.