USD/CAD Fundamental Forecast – February 15, 2016

By:

Published: Feb 12, 2016, 11:34 UTC

Analysis and Recommendations: The USD/CAD dipped 21 points to 1.3916 as oil prices regained some losses and the US dollar recovered a bit. The price of

Analysis and Recommendations:

The USD/CAD dipped 21 points to 1.3916 as oil prices regained some losses and the US dollar recovered a bit. The price of oil suddenly depreciated this week which is when a shocking comment from United Arab Emirates energy minister Suhail bin Mohammed al-Mazrouei said that the Organization of the Petroleum Exporting Countries (OPEC) is now ready to cooperate on crude production levels. The market had reacted positively to rumors of a Russia and OPEC cooperation deal, only to be disappointed when neither side committed. The comment did spur a comeback in the Canadian dollar and the West Texas and Brent crude prices.

Canadian Prime Minister Justin Trudeau was quoted as saying that the budget will not be balanced by the end of his term if current macro-economic conditions continue to worsen. Next month’s budget, the first in this new Liberal government, is highly anticipated to include fiscal stimulus. How much is object of speculation as the Bank of Canada (BoC) is also awaiting the actual budget to analyze the changes to monetary policy it needs to implement if fiscal stimulus fails to reignite the economy. PM Trudeau stressed the negative impact that lower oil prices have had on the Canadian economy.

“Weak oil prices have been closely associated with the decline in the CAD over the past year (and more),” Mr. Osborne, the bank’s chief foreign exchange strategist, and his colleague Mr. Theoret said in a report, referring to the loonie by its symbol and to the U.S. crude benchmark, West Texas intermediate, or WTI.

“The correlation between spot and crude prices has been tight but may be nearing a point where its influence on the CAD weakens to some extent,” they added.

FxEmpire provides in-depth analysis for each asset 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, which covers the current week and are published by Sunday before the new week begins. Daily we share any new events, forecasts or analysis that affect the current day. To achieve a full accurate understanding it is important that you study all of our data and analysis as a whole.

Today’s economic releases:

Cur.	Event	Actual	Forecast	Previous
	China – Lunar New Year
AUD	RBA Governor Stevens Speaks
AUD	Home Loans (MoM) (Dec)	2.6%	3.0%	1.9%
EUR	German CPI (MoM) (Jan)	-0.8%	-0.8%	-0.8%
EUR	German GDP (QoQ) (Q4)	0.3%	0.3%	0.3%
EUR	German GDP (YoY) (Q4)	2.1%	2.3%	1.7%
EUR	EU Finance Ministers Meeting
EUR	GDP (YoY) (Q4)	1.5%	1.5%	1.6%
EUR	GDP (QoQ) (Q4)	0.3%	0.3%	0.3%
EUR	Industrial Production (MoM) (Dec)	-1.0%	0.3%	-0.5%
USD	Core Retail Sales (MoM) (Jan)		0.1%	-0.1%
USD	Export Price Index (MoM) (Jan)		-0.9%	-1.1%
USD	Import Price Index (MoM) (Jan)		-1.4%	-1.2%
USD	Retail Sales (MoM) (Jan)		0.1%	-0.1%

Upcoming Economic Events that you should be monitoring:

Cur.	Event	Actual	Forecast	Previous
	United States – Presidents’ Day
	Canada – Family Day
JPY	GDP (QoQ) (Q4)		-0.3%	0.3%
JPY	GDP (YoY) (Q4)		-1.2%	1.0%
CNY	Exports (YoY) (Jan)		-1.9%	-1.4%
CNY	Imports (YoY) (Jan)		-0.8%	-7.6%
CNY	Trade Balance (Jan)		58.85B	60.09B
JPY	Industrial Production (MoM) (Dec)			-1.4%
EUR	Trade Balance (Dec)			23.6B