It has been a volatile week for the Canadian dollar, but the currency is as quiet as a mouse on Friday. Currently, USD/CAD is trading at 1.2683, up 0.02% on the day.
On the economic calendar, Canada’s Raw Materials Price Index (RMPI), rose 2.2%, marking a tenth consecutive monthly increase.
Powell under the big (virtual) lights
Jackson Hole, Wyoming is usually a beehive of activity in late August, as it plays host to central bankers and other key officials. This year, however, Covid-19 has rained on the party. The event has been scaled down from two days to just one, and the meeting will be virtual in order to comply with health restrictions. Still, the event is being closely watched, with the spotlight on Fed Chair Jerome Powell, who will deliver a crucial speech today which could well be a market-mover. Investors remain cautious ahead of the speech, as US data has become softer and the surge in Covid is threatening to derail the nascent global recovery.
Ahead of Powell’s speech, three FOMC members urged the central bank to speed up its plans to taper its bond purchases. The three members, Robert Kaplan, James Bullard and Esther George are on the hawkish side of the Fed and are non-voting FOMC members in 2021, so their choreographed TV interviews did not have much effect on the markets.
The Fed Chair is expected to be more dovish than the threesome and could opt to focus his remarks on the economy and not say much about tapering. This would allow the Fed to assess economic data ahead of the next policy meeting. Whatever Powell says or doesn’t say today, it’s a sure bet that investors will be circling September 22nd, the date of the Fed’s next policy meeting.
- There is weak resistance at 1.2723. Above, there is resistance at 1.2764
- The next support levels are at 1.2614 and 1.2546