USD/CAD Weekly Fundamental Analysis – Week of May 23, 2016

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Published: May 21, 2016, 07:28 UTC

The USD/CAD closed out the week at 1.3115 seeing a gain of 1.34% this week as the US dollar soared and the oil sands wildfire sparked back up towards the

USD/CAD Weekly Fundamental Analysis – Week of May 23, 2016

The USD/CAD closed out the week at 1.3115 seeing a gain of 1.34% this week as the US dollar soared and the oil sands wildfire sparked back up towards the end of the week. New York Federal Reserve President William Dudley on Thursday said the U.S. economy could be strong enough to warrant a rate increase in June or July.

His comments reinforced surprisingly clear signals of a possibly imminent rate hike in minutes of the Federal Reserve’s April policy meeting and underpinned an already firm greenback.

The dollar index last stood at 95.293, having been as high as 95.502 – a level last seen on March 29. It was up 0.7 percent this week and has risen 2.4 percent in the past three weeks.

Data failed to show a sustained rally in the pair as CPI and Retail Sales both came in below expectations, while Core CPI and Core Retail Sales came in slightly above expectations. The pair had an initial move higher, but was quickly reversed to bring price down to the lower end of the opening range.

The pair managed to do a second run up at the equity open, on the back of US Dollar strength and weakness in Oil prices, to reach highs of 1.3161 prior to dropping below the 1.3150 resistance area once again.

Canadian traders will be off on Monday on a bank holiday. On Wednesday the Bank of Canada is to present its rate statement and overnight rate. No changes are expected in the overnight rate.

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, May 23, 2016
		Canada – Victoria Day
Tuesday, May 24, 2016
	USD	New Home Sales (Apr)		523K	511K
Wednesday, May 25, 2016
	CAD	Interest Rate Decision		0.50%	0.50%
	USD	Crude Oil Inventories			1.310M
Thursday, May 26, 2016
	GBP	GDP (QoQ) (Q1)		0.4%	0.4%
	GBP	GDP (YoY) (Q1)		2.1%	2.1%
	USD	Core Durable Goods Orders (MoM) (Apr)		0.3%	-0.2%
	USD	Pending Home Sales (MoM) (Apr)		0.6%	1.4%
Friday, May 27, 2016
	USD	GDP (QoQ) (Q1)		0.9%	0.5%