USD/CAD Weekly Fundamental Analysis August 20-24, 2012, Forecast

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Introduction: The Canadian Dollar moves in reaction to the US Dollar. Movements are small and easy to track and trade. The Canadian Dollar also responds to economic reports within Canada. It has little action against foreign currencies except during major moves or crisis.

The USD/CAD is the single biggest beneficiary of rising oil prices. Canada which is already the biggest exporter of oil to the US will experience a boost to its economy when oil price continue to increase. Therefore, if oil rises the Canadian dollar is likely to follow. Over the past years, the correlation between the Canadian dollar and oil prices has been approximately 81%. 

Weekly Analysis and Recommendation:

The USD/CAD ended the week up at 1.0107 as the US dollar gained on positive eco data. Overall it was a quiet week both in the US and Canada, with a continuing round of disappointing eco data out of Canada. CPI reported well under forecast where traders were expecting a higher than forecast print. In the US, a round of positive data helped give the US dollar some strength and on lower predictions of monetary stimulus the greenback added towards the end of the week.

Date

Last

Open

High

Low

Change %

Aug 17, 2012

1.0107

1.0135

1.0137

1.0103

-0.28%

Aug 16, 2012

1.0135

1.0107

1.0142

1.0102

0.28%

Aug 15, 2012

1.0107

1.0079

1.0114

1.0066

0.28%

Aug 14, 2012

1.0079

1.0072

1.0093

1.0060

0.07%

Aug 13, 2012

1.0072

1.0084

1.0095

1.0061

-0.12%

FxEmpire provides in-depth analysis for each currency and commodity 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 recent analysis and information in our weekly reports and we provide daily updates and outlooks.

Major Economic Events for the week of August 13-17, 2012 actual v. forecast for the Canadian & US Dollar

Date

Time

Currency

Event 

Actual

Forecast

Previous

Aug 14

12:30

USD

Core Retail Sales m/m

0.8%

0.4%

-0.8%

 

12:30

USD

PPI m/m

0.3%

0.3%

0.1%

 

12:30

USD

Retail Sales m/m

0.8%

0.3%

-0.7%

Aug 15

12:30

USD

Core CPI m/m

0.1%

0.2%

0.2%

Aug 16

12:30

USD

Building Permits

0.81M

0.77M

0.76M

 

12:30

USD

Unemployment Claims

366K

365K

364K

 

14:00

USD

Philly Fed Manufacturing Index

-7.1

-4.7

-12.9

Aug 17

12:30

CAD

Core CPI m/m

-0.1%

0.2%

-0.4%

 

13:55

USD

Prelim UoM Consumer Sentiment

73.6

72.5

72.3

 Historical: From 2010 to present

Highest: 1.0853 CAD on May 25, 2010.

Average: 1.0090 CAD over this period.

Lowest: 0.9407  CAD on Jan 26, 2011.

 

Economic Highlights of the coming week that affect the Canadian and American Markets

Date

Time

Currency

Event 

Previous

Aug 21

12:30

CAD

Wholesale Sales m/m

0.9%

Aug 22

12:30

CAD

Core Retail Sales m/m

0.5%

 

12:30

CAD

Retail Sales m/m

0.3%

 

14:00

USD

Existing Home Sales

4.37M

 

14:30

USD

Crude Oil Inventories

-3.7M

 

18:00

USD

FOMC Meeting Minutes

 

Aug 23

12:30

USD

Unemployment Claims

366K

 

13:00

USD

Flash Manufacturing PMI

51.4

 

14:00

USD

New Home Sales

350K

Aug 24

12:30

USD

Core Durable Goods Orders m/m

-1.1%

 

12:30

USD

Durable Goods Orders m/m

1.6%

 

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About: FX Empire Analyst - Barry Norman

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