Weekly Analysis and Recommendation: The USD/CAD ended a busy week at 1.3847 after gold soared and oil reversed significant losses on Friday. The CAD
The USD/CAD ended a busy week at 1.3847 after gold soared and oil reversed significant losses on Friday. The CAD strengthened as the US dollar tumbled. The Canadian Dollar continues to claw back some of the 23% drop since the May 2015 low against the US Dollar. Much of the rise of the CAD, and subsequent fall on USD/CAD had to do with persistent weakness in the US Dollar that was seen this week. Now, attention will turn to two key fundamental releases next week in Canada along with a look at Oil to see if it can continue to build on Friday’s rally of ~12%.
Looking beyond this week’s economic print of New Housing Price Index, which decreased from 0.2% in November to 0.1% in December, traders will look to see if Friday’s CPI and Retail Sales can build on recent prints. CPI is expected to build on December’s print of 1.6% up to 1.7%. While such a print would keep inflation below the Bank of Canada’s 2% inflation target, it would still likely be the envy of many central bankers whose own inflation readings are near zero.
Retail Sales do not look to have such a stable reading as economists polled expect a drop to -0.7%, down from 1.7% last month.
The US Dollar tumbled for the second straight week against the Japanese Yen and other major counterparts in a volatile week for global markets. Yet upbeat economic data suggests that the move has been overdone, and it seems fairly clear that broader market turmoil remains the biggest driver of currency moves. A US market holiday on Monday makes continued near-term volatility less likely, but the true fireworks will likely come on Sunday night when Chinese traders return from Lunar New Year holidays.
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 15, 2016 | ||||||||
United States – Presidents’ Day | ||||||||
Canada – Family Day | ||||||||
CNY | Trade Balance (Jan) | 58.85B | 60.09B | |||||
Tuesday, February 16, 2016 | ||||||||
GBP | CPI (YoY) (Jan) | 0.3% | 0.2% | |||||
EUR | German ZEW Economic | 3.2 | 10.2 | |||||
Wednesday, February 17, 2016 | ||||||||
GBP | Average Earnings Index | 1.9% | 2.0% | |||||
GBP | Claimant Count Change (Jan) | -3.0K | -4.3K | |||||
USD | Building Permits (Jan) | 1.200M | 1.204M | |||||
USD | PPI (MoM) (Jan) | -0.2% | -0.2% | |||||
Thursday, February 18, 2016 | ||||||||
AUD | Employment Change (Jan) | 15.0K | -1.0K | |||||
CNY | CPI (YoY) (Jan) | 1.9% | 1.6% | |||||
USD | Philadelphia Fed | -2.8 | -3.5 | |||||
USD | Crude Oil Inventories | -0.754M | ||||||
Friday, February 19, 2016 | ||||||||
GBP | Retail Sales (MoM) (Jan) | 0.8% | -1.0% | |||||
USD | Core CPI (MoM) (Jan) | 0.2% | 0.1% | |||||
CAD | Core CPI (MoM) (Jan) | 0.2% | -0.4% | |||||
CAD | Core Retail Sales (MoM) (Dec) | -0.5% | 1.1% |
Upcoming Government Bond Auctions
Date Time Country
Feb 15 13:00 Norway Details of bond auction on Feb 17
Feb 17 11:03 Sweden Holds bond auction
Feb 17 11:05 Norway Holds bond auction
Feb 17 11:30 Germany Euro 5bn 0.5% Feb 2026 Bund
Feb 17 11:30 UK New Jul 2026 Gilt auction
Feb 18 10:30 Spain Holds bond auction
Feb 18 11:50 France Holds bond auction
Feb 18 17:20 Sweden Details of I/L auction on Feb 25
Feb 19 11:10 Italy Details of BTP€i/Zero-coupon auction