USD/CAD Fundamental Analysis August 8, 2012, Forecast

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Analysis and Recommendations:

The USD/CAD slid right through parity to trade at 0.9970. With little eco data from the US this week, and a strong building permit report from Canada, the USD continued to weaken. The greenback has been declining since the positive jobs report on Friday.

Also markets are beginning to convince themselves that the Fed will begin a program of QE at its September 13th meeting. It’s a bit faraway for those worries but they seem to be the lead in eco news this week. Yesterday, Fed Chairman gave a speech on economics, but did touch on QE, on an economic basis, not a do we or don’t we in September basis, but markets took his words as positive.

In the long term traders can expect China to undergo a soft landing, the US to enter another round of QE, the BoC to maintain its hawkish bias and for Canadian domestic data to hold up reasonably well; together this should help to support a strong CAD.

This week’s eco data from China will be very important to global markets, especially commodity related currencies. On Thursday and Friday, China will be releasing an entire range of data for the month of July.

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 7, 2012 actual v. forecast

Date

 

Currency

 

 

 

Event

Actual

 

Forecast

 

Previous

 

 

Aug. 07

 

AUD

 

 

 

Interest Rate Decision 

3.50%

 

3.50% 

 

3.50% 

 

 

 

 

AUD

 

 

 

RBA Rate Statement 

 

 

 

 

 

 

 

 

 

CHF

 

 

 

Unemployment Rate 

2.9%

 

2.9% 

 

2.9% 

 

 

 

 

CHF

 

 

 

CPI (MoM) 

-0.5%

 

-0.6% 

 

-0.3% 

 

 

 

 

GBP

 

 

 

Industrial Production (MoM) 

-2.5%

 

-3.4% 

 

1.0% 

 

 

 

 

GBP

 

 

 

Manufacturing Production (MoM) 

-2.9%

 

-4.1% 

 

1.2% 

 

 

 

 

GBP

 

 

 

Industrial Production (YoY) 

-4.3%

 

-5.0% 

 

-1.8% 

  

 

 

EUR

 

 

 

German Factory Orders (MoM) 

-1.7%

 

-1.0% 

 

0.7% 

  

 

 

CAD

 

 

 

Building Permits (MoM) 

-2.5%

 

-4.0% 

 

7.1% 

  

 

Upcoming Economic Events that affect the CAD and USD

Date

Time

Currency

Event 

Previous

Aug 8

12:30

USD

Prelim Nonfarm Productivity q/q

-0.9%

 

12:30

USD

Prelim Unit Labor Costs q/q

1.3%

 

14:30

USD

Crude Oil Inventories

 

Aug 9

12:15

CAD

Housing Starts

223K

 

12:30

CAD

Trade Balance

-0.8B

 

12:30

CAD

NHPI m/m

0.3%

 

12:30

USD

Trade Balance

-48.7B

 

12:30

USD

Unemployment Claims

 

Aug 10

12:30

CAD

Employment Change

7.3K

 

12:30

CAD

Unemployment Rate

7.2%

 

12:30

USD

Import Prices m/m

-2.7%

 

18:00

USD

Federal Budget Balance

-59.7B

Government Bond Auctions

Date  Time  Country 

Aug 08  09:30  Germany

Aug 08  10:00  Norway

Aug 08  15:30  Italy

Aug 08  17:00  US

Aug 09  15:30  Italy

Aug 09  17:00  US

Aug 10  10:00  Belgium

Aug 13  09:10  Italy

Aug 13  09:10  Norway

Aug 13  09:30  Germany

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