USD/CAD Weekly Fundamental Analysis – February 1-5, 2016 -Forecast

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Published: Jan 30, 2016, 13:23 UTC

Weekly Analysis and Recommendation: The USD/CAD moved below the 1.40 level falling 0.96% this week as the Canadian dollar recovered after oil prices

USD/CAD Weekly Fundamental Analysis – February 1-5, 2016 -Forecast

Weekly Analysis and Recommendation:

The USD/CAD moved below the 1.40 level falling 0.96% this week as the Canadian dollar recovered after oil prices gained at the end of the week. The pair is at 1.3982. The Canadian dollar rallied to a three-week high against its U.S. counterpart as crude oil prices rose, while the potential for a U.S. Federal Reserve rate hike in March was not aided by weaker-than-expected U.S. data. New orders for long-lasting U.S. manufactured goods tumbled 5.1 per cent in December, the latest sign that economic growth weakened significantly at the end of 2015. The U.S. Federal Reserve kept interest rates unchanged on Wednesday and said it was “closely monitoring” global economic and financial developments.

The S&P/TSX composite index closed 230.20 points higher at 12,822.13 on Friday, leaving it down 1.4 per cent or 187.82 points since the start of the year, as oil prices continue to improve. The March contract for North American benchmark crude oil closed up 40 cents at $33.62 a barrel.

It has now risen 18.5 per cent since finishing as low at US$28.36 last week. McKinley said there will be continued volatility in oil prices, but they will improve in the long-run as production growth slows.

The commodity-sensitive Canadian dollar also continued to trend higher on the strength in oil, up 0.22 of a U.S. cent at 71.40 cents US after having rebounded from below 69 cents US early last week.

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:

	Cur.	Event	Actual	Forecast	Previous
Monday, February 1, 2016
	CNY	Manufacturing PMI (Jan)		49.6	49.7
	CNY	Caixin Manufacturing PMI (Jan)		48.0	48.2
	EUR	German Manufacturing PMI (Jan)		52.1	52.1
	GBP	Manufacturing PMI (Jan)		51.8	51.9
	USD	ISM Manufacturing PMI (Jan)		48.0	48.2
Tuesday, February 2, 2016
	AUD	Interest Rate Decision (Feb)		2.00%	2.00%
	EUR	German Unemployment Change (Jan)		-7K	-14K
	GBP	Construction PMI (Jan)		57.6	57.8
Wednesday, February 3, 2016
	NZD	Employment Change (QoQ) (Q4)			-0.4%
	GBP	Services PMI (Jan)		55.4	55.5
	USD	ADP Nonfarm Employment Change (Jan)		195K	257K
	USD	ISM Non-Manufacturing PMI (Jan)		55.1	55.3
	USD	Crude Oil Inventories			8.383M
Thursday, February 4, 2016
	GBP	Interest Rate Decision (Feb)		0.50%	0.50%
Friday, February 5, 2016
	AUD	Retail Sales (MoM) (Dec)		0.5%	0.4%
	USD	Nonfarm Payrolls (Jan)		190K	292K
	USD	Unemployment Rate (Jan)		5.0%	5.0%
	CAD	Employment Change (Jan)		6.0K	22.8K
	CAD	Ivey PMI (Jan)		50.3	49.9