USD/CAD Fundamental Forecast – February 9, 2016

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Published: Feb 8, 2016, 12:35 UTC

Analysis and Recommendations: The USD/CAD was flat at 1.3914 as the fall in oil prices was offset by the climb in gold and stimulus added on Saturday by

USD/CAD Fundamental Forecast – February 9, 2016

Analysis and Recommendations:

The USD/CAD was flat at 1.3914 as the fall in oil prices was offset by the climb in gold and stimulus added on Saturday by the PBOC before the long holiday. Canada is struggling with what Moody’s Analytics calls a “loonie predicament.”

What that means is that the energy provinces are in deep trouble from the collapse in crude prices, while the industrial regions are on a roll as lower oil prices depress the value of the Canadian dollar, thus helping to boost exports.

So for Ontario to prosper because of the currency, Alberta must suffer.

“The drop in oil prices and the cheaper loonie offer the promise of increased cost competitiveness for Canada’s major industrial centers across Ontario and Quebec, even while it represents a threat to major energy-producing provinces such as Alberta, Saskatchewan, and Newfoundland and Labrador,” said Paul Matsiras, an economist at Moody’s Analytics, a sister company to the ratings agency.

‘Canada’s job prospects are only just catching up to the malaise in the rest of the economy’ – Avery Shenfield, chief economist at CIBC World Markets

Canada’s unemployment rate rose to the highest level since December 2013, as the economy lost jobs in the agriculture and manufacturing sectors. The number of jobs declined 5,700 and the unemployment rate climbed to 7.2%, up from 7.1%, according to Statistics Canada. In contrast, economists had predicted a 6,000 gain and an unchanged unemployment rate. The labour market has lost momentum over the last year as crude oil prices around $30 a barrel trigger layoffs. Unemployment has climbed from 6.6% in January 2015, and most economists say the recovery from the commodities slump will take several years to unfold.

FxEmpire provides in-depth analysis for each asset we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports, which covers the current week and are published by Sunday before the new week begins. Daily we share any new events, forecasts or analysis that affect the current day. To achieve a full accurate understanding it is important that you study all of our data and analysis as a whole.

Today’s economic releases:

Cur.	Event	Actual	Forecast	Previous
	China – Lunar New Year
	New Zealand – Waitangi
JPY	Adjusted Current Account	1.64T		1.42T
JPY	Current Account n.s.a. (Dec)	0.96T	0.987T	1.144T

Upcoming Economic Events that you should be monitoring:

Tuesday, February 9, 2016

Cur.	Event	Actual	Forecast	Previous
	China – Lunar New Year
AUD	HIA New Home Sales (MoM) (Dec)			-2.7%
GBP	BRC Retail Sales Monitor (YoY) (Jan)		0.4%	0.1%
AUD	NAB Business Confidence (Jan)			3
EUR	German Industrial Production (MoM)		0.4%	-0.3%
EUR	German Trade Balance (Dec)		20.2B	19.7B
GBP	Trade Balance (Dec)		-10.35B	-10.64B
GBP	Trade Balance Non-EU (Dec)		-2.55B	-2.45B
USD	JOLTs Job Openings (Dec)		5.400M	5.431M