USD/CAD Fundamental Analysis March 22, 2012, Forecast

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Analysis and Recommendations:

The USD/CAD is holding at 0.9925 in mid day trading. The USD has picked up momentum against all of its trading partners. Enthusiasm and a positive view of the economy was the theme of the day as Timothy Geithner and Ben Bernanke testified in front of US Lawmakers.

While the reduction in financial stress in Europe is a welcome development, more needs to be done to fully resolve the crisis, says top U.S. central banker Ben Bernanke. Treasury chief Tim Geithner’s also to deliver congressional testimony. The testimony gave an extra push to the USD. Both men had positive attitudes which translate into strength for the USD and the US economy on the whole.

“The position of the United States has generally been that Europe needs to really step up and do a lot more,” Bernanke said. He and Treasury Secretary Timothy Geithner testified before the House Oversight and Government Reform Committee.

European leaders must strengthen the banking system, build a stronger financial backstop to guard against contagion in sovereign-debt markets, and “critically” take steps to increase growth and competitiveness and reduce external imbalances in the region’s troubled countries, Bernanke said.

“Europe’s financial and economic situation remains difficult, and it is critical that European leaders follow through on their policy commitments to ensure a lasting stabilization,” Bernanke said.

In economic data in the US, the sales of existing homes fell 0.9% in February after an upward revision to the prior month, as improving job prospects, cheaper homes and warm weather led to the best start to the year since the bursting of the housing bubble. The housing market is ripe for a rebirth, now that the jobs market seems to be doing better.

 

Economic Data March 21, 2012 actual v. forecast

Mar. 21

00:30

 

AUD

 

 

 

MI Leading Index (MoM) 

0.6%

 

 

 

0.7% 

   

 

03:00

 

NZD

 

 

 

Credit Card Spending (YoY) 

4.0%

 

 

 

3.1% 

 

 

 

05:30

 

JPY

 

 

 

All Industries Activity Index (MoM) 

-1.0%

 

-0.5% 

 

1.6% 

   

 

08:30

 

THB

 

 

 

Thai Trade Balance 

0.52B

 

-0.10B 

 

-0.20B 

 

 

 

08:30

 

THB

 

 

 

Thai Interest Rate Decision 

3.00%

 

3.00% 

 

3.00% 

 

 

 

10:30

 

GBP

 

 

 

MPC Meeting Minutes 

 

 

 

 

 

 

 

 

10:30

 

GBP

 

 

 

Public Sector Net Borrowing 

12.9B

 

5.2B 

 

-10.2B 

   

 

11:30

 

EUR

 

 

 

German 2-Year Schatz Auction 

0.310%

 

 

 

0.250% 

 

 

 

12:00

 

USD

 

 

 

MBA Mortgage Applications  

-7.4%

 

 

 

-2.4% 

 

 

 

13:30

 

CAD

 

 

 

Leading Indicators (MoM) 

0.6%

 

0.6% 

 

0.4% 

   

 

14:30

 

USD

 

 

 

Fed Chairman Bernanke Testifies 

 

 

 

 

 

 

 

 

15:00

 

USD

 

 

 

Existing Home Sales 

4.59M

 

4.61M 

 

4.63M 

   

 

15:00

 

MXN

 

 

 

Mexican Retail Sales (YoY) 

4.4%

 

4.0% 

 

3.5% 

 

 

 

Economic Events scheduled for March 22, 2012 affecting the USA and Canada

13:30     CAD      Core Retail Sales (MoM)

13:30     CAD      Retail Sales (MoM)

Core Retail Sales measures the change in the total value of sales at the retail level in Canada, excluding automobiles. It is an important indicator of consumer spending and is also considered a pace indicator for the Canadian economy. Retail Sales measure the change in the total value of

13:30     USD      Initial Jobless Claims                     

13:30     USD      Continuing Jobless Claims

Initial Jobless Claims measures the number of individuals who filed for unemployment insurance for the first time during the past week. This is the earliest U.S. economic data, but the market impact varies from week to week. Continuing Jobless Claims measures the number of unemployed individuals who qualify for benefits under unemployment insurance.       

Government Bond Auctions (this week)

Mar 22  10:10  Sweden  I/L bond auction

Mar 22  10.30  UK  Auctions 0.625% 2042 I/L Gilt

Mar 22  15:00  US

Announces auctions of 2Y Notes on Mar 27, 5Y Notes on Mar

28 & 7Y Notes on Mar 29

 

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