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USD/CAD Fundamental Analysis – August 18, 2015 – Forecast

By:
Barry Norman
Published: Aug 17, 2015, 11:14 UTC

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

USD/CAD Fundamental Analysis – August 18, 2015 – Forecast

usd cad bns month
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 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.

 

Event

Actual

Forecast

Previous

 

  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

 

 

  CAD

 

Foreign Securities Purchases (Jun)

 

 

-5.45B

   

 

USDCAD(60 minutes)20150817065744

Upcoming Economic Events that you should be monitoring:

Tuesday, August 18, 2015

Cur.

 

Event

Actual

Forecast

Previous

 

  AUD

 

Monetary Policy Meeting Minutes

 

 

 

 

 

  GBP

 

CPI (YoY) (Jul)

 

 

 

 

 

  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

 

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