USD/CAD Fundamental Analysis August 17, 2012, Forecast

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By FX Empire Analyst - Barry Norman
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Analysis and Recommendations:

The USD/CAD declined trading at 0.9876 as the USD lost momentum after a rash of negative eco data ranging from housing starts to unemployment, to manufacturing.

CAD is strong, having gained 0.1% since yesterday’s close. It is noteworthy that as US yields have risen, CAD has rallied. This has been on the back of strengthening US data and falling volatility, which has supported the risk trade and increased expectations for BoC interest rate hikes. The OIS market is now pricing in 28% probability of an interest rate hike in Canada over the next 9‐months

FxEmpire provides in-depth analysis for each currency and commodity 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.

Economic Data August 16, 2012 actual v. forecast

Date

 

Currency

 

 

 

Event

Actual

 

Forecast

 

Previous

 

 

Aug. 16

 

KRW

 

 

 

South Korean Unemployment Rate 

3.1%

 

3.3% 

 

3.2% 

 

 

 

 

GBP

 

 

 

Retail Sales (MoM) 

0.3%

 

-0.1% 

 

0.8% 

   

 

 

GBP

 

 

 

Retail Sales (YoY) 

2.8%

 

1.4% 

 

2.6% 

   

 

 

EUR

 

 

 

CPI (YoY) 

2.4%

 

2.4% 

 

2.4% 

 

 

 

 

EUR

 

 

 

Core CPI (YoY) 

1.7%

 

1.9% 

 

1.6% 

 

 

 

 

USD

 

 

 

Building Permits 

0.812M

 

0.770M 

 

0.760M 

 

 

 

 

CAD

 

 

 

Foreign Securities Purchases 

-7.89B

 

10.67B 

 

26.11B 

 

 

 

 

USD

 

 

 

Housing Starts 

0.746M

 

0.757M 

 

0.754M 

   

 

 

CAD

 

 

 

Manufacturing Sales (MoM) 

-0.40%

 

0.40% 

 

-0.40% 

 

 

 

 

USD

 

 

 

Initial Jobless Claims 

366K

 

365K 

 

364K 

   

 

 

USD

 

 

 

Continuing Jobless Claims 

3305K

 

3300K 

 

3336K 

   

 

 

USD

 

 

 

Philadelphia Fed Manufacturing Index 

-7.1

 

-5.0 

 

-12.9 

 

 

Upcoming Economic Events that affect the CAD and USD

Date

Time

Currency

Event

Forecast

Previous

Aug 17

12:30

CAD

Core CPI m/m

0.2%

-0.4%

 

12:30

CAD

CPI m/m

0.2%

-0.4%

 

13:55

USD

Prelim UoM Consumer Sentiment

72.5

72.3

 

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