USD/CAD Fundamental Analysis August 20, 2013 Forecast

Analysis and Recommendations:

The USD/CAD eased by 10 pips as market shifts with no direction. The pair is trading at 1.0329. The Canadian dollar was little changed before reports forecast to show retail sales contracted and inflation picked up.

The currency fell versus its U.S. counterpart last week with the Federal Reserve forecast to slow monetary stimulus next month. The U.S. central bank will reduce the $85 billion in monthly bond purchases it’s used to lower interest rates and stimulate the economy next month, according to 65 percent of economists surveyed by Bloomberg. Central-bank bond purchases tend to debase a currency.

The CAD is up 0.1% since Friday’s close leading into the NA session and essentially flat month‐to‐date. Today’s session has been quiet, with USDCAD still trading comfortably between its 100 and 50‐day MA (1.0287 and 1.0369, respectively) and within its narrow seven session 94‐point range. With just two weeks left before Governor Poloz’ second interest rate decision (September 4th), this week’s CPI release (Friday) will prove an important input. The OIS market is currently pricing in a 25% probability that the BoC hikes interest rates within the next 12‐months

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.

Economic Data August 19, 2013 actual v. forecast

 

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