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Trade data and US jobs numbers to affect USD/CAD - TD Securities

FXStreet (Łódź) - The TD Securities team of experts suggest that Canada's August trade data and the reaction of the greenback to the US NFP report, released at the same time, might move the CAD.

Key quotes

"After some robust data in the past few months, which have contributed to the rebound in GDP, the street is looking for a pullback in the trade surplus to CAD1.6bn in August, down from July's CAD2.58bn black ink entry; that was the widest surplus since 2008 but might have been driven by some one-offs."

"A smaller trade surplus should not be too much of a drag on the CAD and another positive surprise should be a mild positive, at least."

"It is unlikely to change the thinking in Ottawa to any extent, however. We can see from the latest GDP reports that trade has been a stronger contributor to growth but the Canadian export sector still has a fair bit of ground to make up, having lagged behind the global trade recovery in the past few years."

"And that other, long-AWOL component of GDP growth that officials are hoping to do more of the growth heavy-lifting—investment– remains sluggish."
"Better trade data will be a plus, but only a modest one, for the CAD. More important for USDCAD today will be the big dollar’s reaction to the US employment data."

"Chart-wise, the mid-week turn lower in USDCAD is still suggestive of a stall in the USD rally, even taking into account yesterday’s rebound off the lows."

"The USD has nudged higher overnight but might be running into a little more selling interest as the North American session gets underway."

"We see short-term resistance at 1.1205/10 this morning and a little more softness likely again below 1.1160/65."

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