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USD Rallies on Consumer, Housing Data

Published December 28, 2016
  • Oil prices came close to a 17-month peak early Wednesday morning as investors look to the start of the OPEC deal next month
  • Commencing in January, a combination of OPEC and Non-OPEC members will all cut oil production in an attempt to reduce supply and raise oil prices; recent comments from Russia, Venezuela and Iraq have all spurred confidence in the deal
  • The members of an OPEC and non-OPEC committee that is responsible for monitoring the market will meet on January 13, 2017; this may provide an early indication of compliance with the agreement
  • The Dow Jones Industrial Average came extremely close to the psychologically important 20,000-point level with a close at 19,933 on December 26; investors are hoping for a “Santa Claus” rally to bring the Dow to new record highs
  • President-Elect Donald Trump took credit for the higher than expected US Consumer Confidence Index level (113.7 vs. expected 108.9) in a late-night tweet yesterday; highest level for the index in 15 years
  • As a result, the U.S. Dollar continues its rally as it moved higher against major currencies for a second day on Wednesday on the back of the positive Consumer Confidence Index and last week’s housing data
  • The market will look to Pending House Sales data out of the US today; there is no Canadian data for the rest of the week
  • USD/CAD continues to rise and test 1.3600 as a strong resistance level

Charts (1) USD/CAD above 50,100, 200 day moving averages