The USD/CAD pair was little changed on Thursday, where the trade deficit in Canada widened worse than expectations, which weighed down on the CAD against the USD, while the better than expected jobless claims from the United States failed to boost optimism in higher yielding currencies, as traders remained cautious on rising fears the European debt crisis is spreading into major economies within the Euro Zone area, which provided the USD/CAD pair with bullish momentum.
The huge pessimism that continues to dominate global financial markets should continue to boost demand for lower yielding and more safe assets, and accordingly, we preserve our bullish outlook for the USD/CAD pair, and any downside movements are not expected to prevail, since risk aversion will provide the USD/CAD pair with the needed bullish momentum.
Friday August 12:
The United States will end the week with a high note starting with the retail sales index for July at 12:30 GMT, which are expected with 0.4% rise following 0.1% and excluding autos with 0.2% rise after remaining unchanged in June and excluding auto and gas to hold steady with 0.2% rise.
The University of Michigan Confidence for August is due at 13:55 GMT, and expected with a slight drop to 63.2 from 63.7.
The business inventories index for June will follow at 14:00 GMT and expected to slow to 0.6% from 1.0% the previous month.