USD/CAD Fundamental Forecast – May 25, 2016

By:

Published: May 24, 2016, 10:42 UTC

The USD/CAD gained 17 points to 1.3159 as the greenback continued to strengthen and traders prepare for the Bank of Canada rate decision this week. Lower

The USD/CAD gained 17 points to 1.3159 as the greenback continued to strengthen and traders prepare for the Bank of Canada rate decision this week. Lower gold and oil prices are weighing heavily on the commodity currency. There has been no US economic data to drive the direction of trading today, but there are several important reports due to be released later this week. International trade, durable goods orders and GDP are all on the schedule this week and Fed Chair Janet Yellen is expected to give a speech this Friday.

The Federal Reserve is moving closer to “slow normalization” of interest rates, St. Louis Fed President James Bullard said in Beijing Monday. “By nearly any metric, US labor markets are at or beyond full employment,” Bullard said. “This may put upward pressure on inflation going forward.”

The dollar rallied and crude oil fell with gold as speculation mounted that the Federal Reserve will raise interest rates as early as next month. The pound jumped and European stocks gained.

The US currency touched its strongest level in eight weeks against the euro, while Australia’s dollar and the Malaysia’s ringgit were among the biggest losers, as the prospect of higher interest rates boosted demand for the greenback.

The stronger dollar also weighed on commodities, as gold headed for its longest losing streak since November and Brent crude oil declined for a fifth day. Sterling was boosted by a poll showing support for staying in the European Union is solidifying, while the Turkish lira gained after a cabinet reshuffle.

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.

Upcoming Economic Events that you should be monitoring:

Wednesday, May 25, 2016

Cur.	Event	Actual	Forecast	Previous
USD	API Weekly Crude Oil Stock			-1.140M
NZD	Trade Balance (YoY) (Apr)		-3,940M	-3,380M
NZD	Trade Balance (MoM) (Apr)		60M	117M
AUD	Construction Work Done (QoQ) (Q1)		-1.5%	-3.6%
EUR	EU Finance Ministers Meeting
USD	Goods Trade Balance (Apr)		-60.10B	-56.90B
USD	FOMC Member Harker Speaks
USD	Services PMI (May)		53.1	52.8
CAD	Interest Rate Decision		0.50%	0.50%
USD	Crude Oil Inventories			1.310M
USD	FOMC Member Kashkari Speaks
USD	FOMC Member Kaplan Speaks