USD/CAD Daily Fundamental Analysis for August 26, 2011
Fundamental Reports
The USD/CAD pair extended its losses on Thursday ahead of Bernanke’s speech on Friday, as investors remained cautious over the prospects of whether the Fed would announce a third round of quantitative easing or not, while the unexpected rise in U.S. jobless claims, weighed down on the USD, which pushed the USD/CAD pair to the downside.
Investors will be eyeing a key speech by the Fed’s Chairman Ben Bernanke on Friday, and If the Fed announces QE3, we should expect the USD/CAD pair to extend its losses over the coming period, since it will weaken the USD and will also boost demand for riskier assets, which will provide the CAD with strong momentum to push the USD/CAD pair further to the downside. Moreover, traders will be also waiting the second GDP estimate for the second quarter from the United States, where the U.S. economy is expected to have expanded at a slower pace, compared with the prior estimate.
Friday August 26:
The week will end with the infamous GDP from the U.S. at 12:30 GMT. The preliminary reading for the second quarter is expected downbeat on the market with the projected downside revision to 1.1% from 1.3%. Personal consumption expected with upside revision to 0.2% from 0.1% while the Core PCE expected steady at 2.1%.
The week will end with the University of Michigan Confidence final reading for August at 13:55 GMT, which is expected with an upside revision to 56.0 from the advanced estimate of 54.9.
Bernanke will deliver his highly anticipated speech at 14:00 GMT at Jackson Hole, where investors will be looking for hints whether the Fed will undertake QE3 or not.
Mrs. Irit Rutenberg is FXEmpire.com Content and Analysis Team Manager, with a few years of experience in the field. The FXEmpire.com news desk members are all of an academic background in the finance field with practical and theoretical experience in trading.
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