USD/CAD Fundamental Forecast – June 30, 2016

The Canadian Dollar traded higher against the U.S. Dollar, boosted by stronger demand for higher yielding assets, higher crude oil and a weaker U.S. Dollar. The USD/CAD traded at 1.2981, down 0.0044 or -0.34%.

The Canadian Dollar received a boost after August Crude Oil futures spiked to $49.14 a barrel on Wednesday, following the release of a government report that showed weekly U.S. crude stockpiles fell more than expected. According to the U.S. Energy Information Administration, commercial crude inventories declined by 4.1 million barrels to 526.6 million barrels in the week-ended June 24.

Late Tuesday, the American Petroleum Institute (API) released its weekly report that showed U.S. crude inventories fell by 3.9 million barrels in the week to June 24, far more than the 2.4 million barrels expected by analysts.

Gasoline stockpiles rose by 1.4 million barrels, while distillate fuel inventories decreased by 1.8 million b barrels.

The EIA report also said that U.S. crude oil production fell by 55,000 barrels a day. That follows a decline of 39,000 bpd in the previous week.

Internationally favored Brent Crude also surged to $49.67, up $1.09 or +2.2 percent.

Earlier in the session, oil prices were supported by news of a potential oil workers strike in Norway and a crisis in Venezuela. Both events are affecting the supply side.

In U.S. economic news, pending home sales fell a more-than-expected 3.7 percent in May from the prior month, of a 0.2 percent year-over-year decline and the first annual drop in two years.

Consumer spending rose 0.4 percent in May as expected. Personal income increased 0.2 percent, on target with the estimate.

The Fed’s preferred inflation measure of personal consumption expenditures (PCE) price ex-food and energy rose 0.2 percent last month, or 1.6 percent over the 12 months through May. The Fed would like to see this figures at 2.0 percent or higher.

Treasury yields backed off their session highs as investors priced in a possible rate cut in September. Federal Reserve governor Jerome Powell also said on Tuesday that Brexit could pose a threat to the U.S. economy. These events helped pressure the U.S. Dollar.

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.

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Thursday, June 30, 2016

Government Bond Auctions

Jun 30 11:10 Italy Holds bond auction