USD/CAD Fundamental Analysis September 21, 2012, Forecast

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Analysis and Recommendations:

The USD/CAD soared today to trade at 0.9786 adding 0.0041 pips. The USD gained momentum on positive housing data and jobless claims along with a surprising Philly Fed Index, which was expected to show a large drop after the negative data reported in the Empire Index earlier this week.

CAD is weak, having lost 0.4% since yesterday’s close. The weakness was spurred by the release of a disappointing and contractionary HSBC Chinese PMI and aggravated by falling oil prices, which have dropped 9.7% over the last week. Last week the CFTC reported that net long CAD positions had jumped over $10bn, a record high. The positioning suggests that the market is bullish CAD; however should sentiment turn against CAD the risk is that there is accelerated selling as traders move to unwind long exposure. An environment of slowing global growth and weak oil prices is typically not a supportive environment for CAD.

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 September 20, 2012 actual v. forecast

Date

 

Currency

 

 

Event

Actual

 

Forecast

 

Previous

 

 

Sep. 20

 

JPY

 

 

Trade Balance 

-0.47T

 

-0.37T 

 

-0.37T 

  

 

 

CNY

 

 

Chinese HSBC Manufacturing PMI 

47.80

 

 

 

47.60 

 

 

 

 

EUR

 

 

French Manufacturing PMI 

42.6

 

46.4 

 

46.0 

 

 

 

 

EUR

 

 

German Manufacturing PMI 

47.3

 

45.3 

 

44.7 

 

 

 

 

EUR

 

 

Manufacturing PMI 

46.0

 

45.4 

 

45.1 

 

 

 

 

GBP

 

 

Retail Sales (MoM) 

-0.2%

 

-0.4% 

 

0.3% 

 

 

 

 

GBP

 

 

Retail Sales (YoY) 

2.7%

 

2.7% 

 

2.3% 

  

 

 

GBP

 

 

CBI Industrial Trends Orders 

-8

 

-15 

 

-21 

 

 

 

 

USD

 

 

Initial Jobless Claims 

382K

 

375K 

 

385K 

  

 

 

USD

 

 

Continuing Jobless Claims 

3272K

 

3300K 

 

3304K 

  

 

 

USD

 

 

Philadelphia Fed Manufacturing Index 

-1.9

 

-4.0 

 

-7.1 

  

 

Upcoming Economic Events that affect the CAD and USD

Date

Time

Currency

Event

Forecast

Previous

Sep. 21

13:30

CAD

CPI (MoM) 

 

-0.1% 

 

13:30

CAD

Wholesale Sales (MoM) 

 

-0.1% 

 

13:30

CAD

CPI (YoY) 

1.0% 

1.3% 

Government Bond Auction

Date Time Country 

Sep 21 15:30 Italy

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About:FX Empire Analyst - Barry Norman

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