USD/CAD Fundamental Forecast – February 8, 2016

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Published: Feb 5, 2016, 13:03 UTC

Analysis and Recommendations: The USD/CAD dipped 15 points to trade at 1.3739 as the rising prices of gold and oil helped support the CAD. The US dollar

Analysis and Recommendations:

The USD/CAD dipped 15 points to trade at 1.3739 as the rising prices of gold and oil helped support the CAD. The US dollar inched up from a 2-1/2-month low on Friday but was on track for its heaviest weekly loss since 2009, as investors awaited U.S. employment data for justification of the view that the Federal Reserve will not raise rates in 2016.

The dollar has shed almost 3 percent against a basket of major currencies since Monday as expectations that the Fed would raise interest rates at least once this year have all but evaporated amid signs of domestic weakness and broader concerns over global growth.

The Canadian dollar rallied versus its US counterpart as disappointing data continues to hurt the USD. U.S. unemployment claims recording a rise of 8,000 applications for 285,000 last week when only 2,000 was forecasted. The rise in the number of claims joins both purchasing managers’ indices (PMI) manufacturing and non-manufacturing, which are leading indicators of economic health, coming in below expectations.

The currency pair had a volatile day of trading with a 1.16 percent difference between the daily high and low price levels. The loonie managed to remain under 1.38 and will be awaiting the results of Canadian and American employment data to be published on Friday morning.

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
AUD	Retail Sales (MoM) (Dec)		0.5%	0.4%
USD	Nonfarm Payrolls (Jan)		190K	292K
USD	Unemployment Rate (Jan)		5.0%	5.0%
CAD	Employment Change (Jan)		5.5K	22.8K
CAD	Ivey PMI (Jan)		50.0	49.9