Analysis and Recommendations: The USD/CAD is up 47 points at 131.36 as the CAD weakened on strength in the US dollar. The CAD continued to fall as oil
The USD/CAD is up 47 points at 131.36 as the CAD weakened on strength in the US dollar. The CAD continued to fall as oil prices continued to tank. The US dollar is trading in the green today after strong data on Friday. Oil prices fell to near six-year lows on Monday as Japan’s economy contracted and producers in the United States added drilling rigs for a fourth straight week despite a recent rout in prices.
The pressure on the loonie comes as oil sinks to a new six-year low. West Texas Intermediate (WTI) crude sank as low as $41.92 (U.S) a barrel at mid-afternoon. It closed at $42.22 (U.S), down 2.5 per cent from Wednesday’s close.
News out of China continues to impact currency markets. China’s central bank devalued its currency on Tuesday by 1.9 per cent and Wednesday by 1.8 per cent, bringing volatility to currencies around the world including the loonie. In a statement issued on Thursday from China’s central bank, they reassured world markets that there is no reason for the yuan’s weakness to persist and they would step in if the large fluctuations continued.
In Canada the new housing price index kicked of the day, year over year prices rose 0.3 per cent. Statistics Canada says the gain was largely as a result of gains in Ontario. This was the third consecutive monthly price increase for the index.
The Canadian dollar was also under pressure as the U.S. dollar was stronger on Thursday. The dollar strengthened as a rebound in retail sales supported the case for higher U.S. interest rates.
The shrunken loonie is helping encourage Americans to holiday in Canada, where their dollars are going much further than when the currencies were at par.
Like Canadian exporters, who gain competitiveness when the dollar sinks, the travel industry is finding itself on the winning end of the exchange rate imbalance. The Canadian dollar, which was over 90 cents (U.S.) for all of last summer, fell below 85 cents in January, and has been under 80 cents since early July.
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:
Cur. |
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Event |
Actual |
Forecast |
Previous |
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JPY |
GDP (QoQ) (Q2) |
-0.4% |
-0.5% |
1.1% |
|||
JPY |
GDP (YoY) (Q2) |
-1.6% |
-1.9% |
4.5% |
|||
EUR |
Trade Balance (Jun) |
26.4B |
|
18.8B |
|
||
USD |
NY Empire State Manufacturing Index |
|
5.00 |
3.86 |
|
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CAD |
Foreign Securities Purchases (Jun) |
|
|
-5.45B |
Upcoming Economic Events that you should be monitoring:
Tuesday, August 18, 2015
Cur. |
Event |
Actual |
Forecast |
Previous |
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AUD |
Monetary Policy Meeting Minutes |
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GBP |
CPI (YoY) (Jul) |
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|
|
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USD |
Building Permits (Jul) |
|
1.232M |
1.337M |
Government Bond Auctions
Date Time Country
Aug 19 11:30 Germany Eur 5bn Sep 2017 Schatz
Aug 19 11:03 Sweden Holds bond auction
Aug 20 10:30 Spain Auctions Bonos/Obligaciones
Aug 20 11:30 UK Auctions 4.25% 2036 Gilt
Aug 21 17:30 Italy Announces details of CTZ/BTPei on 26 Aug