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USD/CAD Fundamental Forecast – May 6, 2016

By:
Barry Norman
Published: May 5, 2016, 10:35 UTC

The USD/CAD dipped 36 points to trade at 1.2837 as oil prices recovered but so did the US dollar. Reversing direction, the US dollar climbed against its

USD/CAD Fundamental Forecast – May 6, 2016

The USD/CAD dipped 36 points to trade at 1.2837 as oil prices recovered but so did the US dollar. Reversing direction, the US dollar climbed against its key counterparts in early European deals on Thursday.

The greenback advanced to a 6-day high of 0.9606 against the franc and a 3-day high of 1.1450 versus the euro, off its early lows of 0.9569 and 1.1494, respectively. The surge in oil prices helped support the Loonie which is about the only currency to outperform the greenback today.

Despite the loonie losing more than a cent U.S. earlier this week it’s trading at around 79 cents U.S., some 10 cents U.S. higher than its lows in January. That new-found strength “poses a risk to newly won export gains,” BMO chief economist Doug Porter wrote in a client note Wednesday.

“The exchange rate is a massive underlying force. And the three-month surge in the Canadian dollar threatens to undermine those gains.”

But that trend now appears to be fizzling. Statistics Canada reported Wednesday that exports took a steep dive in March, pushing Canada’s trade deficit with the rest of the world to record high of $3.4 billion, up from $2.5 billion in February.

The loonie is closely tied to the moves in the price of oil, which was also down. Benchmark North American crude was higher by $1.13 US per barrel, trading at $43.65.

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.

usd cad

Upcoming Economic Events that you should be monitoring:

Friday, May 6, 2016

Cur. Event Actual Forecast Previous
  USD FOMC Member Bullard Speaks        
  USD FOMC Member Kaplan Speaks        
  USD FOMC Member Lockhart Speaks        
  USD FOMC Member Williams Speaks        
  AUD RBA Monetary Policy Statement        
  USD Average Hourly Earnings (MoM) (Apr)   0.3% 0.3%  
  USD Nonfarm Payrolls (Apr)   202K 215K  
  USD Participation Rate (Apr)     63.0%  
  USD Private Nonfarm Payrolls (Apr)   193K 195K  
  USD Unemployment Rate (Apr)   5.0% 5.0%  
  USD Baker Hughes U.S. Rig Count     332

Government Bond Auctions

Date Time       Country           Auction

May 05 10:30 Spain Holds bond auction

May 05 11:00 Austria Holds bond auction

May 05 11:30 UK Gbp 2.5bn 1.5% 2026 Gilt

May 09 17:20 Italy Announces details of bond auction

May 09 N/A Ireland Details of bond auction on May 12

May 10 11:30 Germany Holds I/L bond auction

May 11 11:03 Sweden Holds bond auction

May 11 11:30 Germany Eur 5bn Jun 2018 Schatz

May 12 11:10 Italy Holds bond auction

May 12 17:20 Sweden Details of I/L auction on May 19

May 12 N/A Ireland Holds bond auction

 

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