USD/CAD Fundamental Forecast – August 1, 2016

The USD/CAD climbed 19 points to 1.3175 as the US dollar continued to fall but weakness in oil prices weighed heavily on the CAD. The greenback has been under pressure since Wednesday’s FOMC meeting, where the Federal Reserve kept fed funds unchanged in the 0.25 – 0.50% range. The following statement failed to provide any boost for the US dollar and it was sold-off.

Canadian GDP for May data are due, with both the monthly and yearly change expected to weaken notably.

Meanwhile, the US oil benchmark – WTI – was losing ground again and was 1% lower during the London session, trading around $40.70. Its European peer – Brent – was more than 1.5% weaker and hovering around $42.00. Nevertheless, falling oil did not undermine the Canadian dollar as investors are waiting for the GDP data.

Meanwhile the Bank of Japan this morning held rates and made little change to monetary policy disappointing traders’ expectations.

From the US dollar perspective, the first estimate of the US GDP for the second quarter is due and should improve notably to 2.6% from 1.1% in the previous quarter.

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Upcoming Economic Events that you should be monitoring:

Monday, August 1, 2016

Government Bond Auctions

Date/Time Country Type

Aug 2   JPY                  10-Year JGB Auction                          -0.243%

Aug 2   USD                4-Week Bill Auction                           0.270%