USD/CAD Fundamental Analysis, April 17, 2015 – Forecast

Analysis and Recommendations:

The USD/CAD recovered 23 points as the dollar recovered from Wednesday’s declines The Canadian dollar had one of its strongest days in months yesterday, gaining about two cents mainly because of a rebound in oil prices. The loonie was trading in the green in the minutes before the Bank of Canada released its latest interest rate decision, which was to keep its benchmark rate steady where it is, at 0.75 per cent.

About a quarter of analysts polled by Bloomberg before the decision had been expecting a rate cut, which would have sent the loonie lower because it would make Canada less attractive for investors. So when the central bank decided to do nothing that was perceived as good news from a currency perspective at least.

The main catalyst driving the loonie up, however, was oil. The price of a barrel of the North American oil benchmark known as West Texas Intermediate jumped up more than five per cent to $56.07 US, a high for the year.

There isn’t much activity expected until the opening of the North American session. A relatively quiet European data calendar will likely see investors looking ahead to US news-flow for direction cues. “Fed-speak” is in focus, with comments from Vice Chair Stanley Fischer and Atlanta Fed President Dennis Lockhart of particular note considering both are currently members of the FOMC rate-setting committee. Cleveland Fed President Loretta Mester and Boston Fed President Eric Rosengren are likewise due to speak.

Needless to say, the timing of the first post-QE rate hike is the central question on the minds of investors. Rhetoric pointing to the lingering possibility of a mid-year move, particularly from the typically dovish Mr Lockhart, may breathe new life into the US Dollar and send the currency higher after two days of losses. Alternatively, a more timid tone points to compound selling pressure facing the greenback.

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 up to the data analysis and information in our weekly reports.

Today’s economic releases actual vs. forecast:

There is a slew of US economic data in the North American session

Upcoming Economic Events that you should be monitoring:

Friday, April 17, 2015

Government Bond Auctions

Date Time Country

Apr 20 12:00 Norway Details bond auction on 22 Apr

Apr 20 12:00 Belgium Auctions OLOs

Apr 21 11:30 UK Auctions 3.5% 2045 Conventional Gilt

Apr 22 11:03 Sweden Holds bond auction

Apr 22 11:15 Norway Holds bond auction

Apr 22 17:30 Italy Announces details of CTZ/BTPei on 27 Apr

Apr 23 17:00 US Announces 2-yr FRN, plus 2/5/7 yr Notes

Apr 23 19:00 US Auctions 5-yr TIPS

Apr 24 17:30 Italy Announces details of BTP/CCTeu on 29 Apr