Today’s Spotlight Market
First, a quick recap of the August non-farm payrolls released today as the United States heads into Labor Day weekend. 151,000 jobs were created for August, and the unemployment rate remained at 4.9%. Factory orders for July, however, jumped by 1.9%. The mixed economic news will have Fed watchers casting doubt on the possibility of a September rate hike in the United States.
Fundamentals
Turning to the Canadian economy, the aftermath of the costliest natural disaster, the Fort McMurray wildfires in Canadian history continue to affect the Canadian economy.? The fires affected the Athabasca oil sands operations in northeastern Alberta, laying another blow to an industry that was already reeling due to the sharp decline in crude oil prices. The province of Alberta is now struggling with a provincial unemployment rate of 8.6%.
At the most recent meeting of the Bank of Canada on July 13, the Bank elected to leave interest rates unchanged at 0.5%. It has been a volatile year in the Canadian economy; the economy grew by 2.4% in the first quarter and then promptly contracted by 1% in the second quarter. For the third quarter, the Bank of Canada is expecting a growth rate of 3.5%. In addition to commodity prices, the Bank of Canada is becoming increasingly concerned about extremely hot housing markets in Toronto and Vancouver. In July, housing prices in Toronto rose by 3.1% and by 2.3% in Vancouver.
Technical Notes? -? View Today’s Chart
Turning to the 3 month continuation chart, we see some very choppy trading for the Canadian dollar. Trading has oscillated from the support level of .7550 to the resistance level of .7900. While the 20-day Simple Moving Average (SMA) has crossed above the 50-day SMA, current trading shows the 50-day SMA as a short-term resistance point. The averages are close together, and a slight bullish move could easily push the Canadian Dollar above the 20-day SMA, a bullish sign. 14-day Relative Strength Index is a completely neutral at 50.30.
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