USD/CAD Fundamental Analysis – August 21, 2015 – Forecast

Analysis and Recommendations:

The USD/CAD recovered adding 39 points as the Loonie fell to new lows as crude oil prices continued to tumble. The CAD is trading at 1.3167. Colin Cieszynski, chief market strategist at CMC Markets Canada, said activity in the markets is cooling as the weather outside heats up. “Generally speaking we’re into the summer doldrums in the markets,” he said.

Volatility at the beginning of the summer after the Bank of Canada announced another cut to its benchmark interest rate, and a slide in oil to new lows, could have caused many market participants to delay their vacations, he said.

“We’re past a lot of the economic news, we’re past most of the earnings reports for this quarter,” he said. “It’s summer vacation season and a lot of people are away on holidays.”

Earlier, the Shanghai market in China dropped more than six per cent and Hong Kong’s Hang Seng fell 1.43 per cent, again raising concerns about the strength of the world’s second-largest economy. The sell-off followed Beijing’s efforts to stabilize the market, including share buying by state-owned companies and a ban on selling by certain major shareholders.

The cheap Canadian dollar compelled Americans to take almost two million trips to Canada in June, the highest level since passport requirements came into effect seven years ago.

Statistics Canada reported Wednesday that U.S. residents made 1.9 million trips to Canada in June, a rise of 3.3 per cent from May. “This was the highest level in over seven years,” the data agency said. In 2008, the U.S. passed a law requiring all Americans to have a valid passport or other travel-related documents to leave the country.

Much of June’s tourist increase came in the form of road trips, as Americans took 7.7 per cent more overnight car trips to Canada and 5.5 per cent more same-day car trips.

The loonie hovered around the 80-cent US level for much of the month, giving Americans more purchasing power for their U.S. dollars.

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:

 

Upcoming Economic Events that you should be monitoring:

Friday, August 21, 2015

Government Bond Auctions

Date Time Country

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