USD/CAD Fundamental Forecast – July 26, 2016

The USD/CAD gained 30 points to trade at 1.3158 as the CAD is weighed down by lower oil and gold prices ahead of some big Canadian data this week. The Canadian dollar slipped against most major currencies in early European trading on Monday, amid falling oil prices, as the US rig count increased for the fourth consecutive week, adding to worries over a supply glut.

Upbeat US business activity data on Friday added to prospects of a Federal Reserve interest rate hike within the year and supported the greenback.

Improved risk sentiment – Wall Street shares have hit consecutive record highs this month – has weighed on the Japanese currency, which has fallen roughly 7 per cent against the dollar from a three-year peak reached soon after the Brexit referendum a month ago.

The Fed is widely expected to stand pat on monetary policy, and investors will be sifting through its statements for any hint of a near-term rate increase following recently firm US economic indicators that have revived tightening expectations.

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Upcoming Economic Events that you should be monitoring:

Tuesday, July 26, 2016

Government Bond Auctions

Date/Time Country Type

Jul 25 11:30 Germany Eur 1.5bn Jul 2017 Bubill

Jul 25 17:20 Italy Announces details of bond auction

Jul 26 11:10 Italy Holds zero-coupon/BTP€i auction

Jul 27 11:30 Germany Eur 1bn 2.5% Aug 2046 Bund

Jul 28 11:10 Italy Holds bond auction