USD/CAD Fundamental Analysis – August 24, 2015 – Forecast

Analysis and Recommendations:

The USD/CAD added 18 points as oil prices continued to plummet weighing heavily on the Canadian economy. There are several important data points due later in today’s session but there is nothing supportive of the economic situation after a drop in Chinese manufacturing and the fall of oil. The CAD is trading at 1.3106. The price of a barrel of oil closed below the $41 level dragging the Canadian dollar briefly below 76 cents US in the process. The Canadian dollar, which is closely tied to the price of oil, sold off on the news, trading down a third of a cent.

North American markets suffered steep losses, with the Toronto Stock Exchange registering a triple-digit decline for a second consecutive day amid weak energy markets, a sell-off in China and the expectation that the U.S. Federal Reserve will raise interest rates this fall.

The Canadian dollar was finding support from softening expectations of a Federal Reserve rate hike in September. Fed members suggested in minutes released this week from their last policy meeting that they were looking for more favorable inflationary data before raising rates.

The Canadian dollar received another boost at the beginning of Thursday’s trading day.  Statistics Canada reported wholesale trade rebounded in June 2015, rising 1.3 per cent, after a drop in May.

Later today currency traders will be looking ahead to Statistics Canada’s highly anticipated Consumer Price Index (CPI) and retails sales. CPI could give market players hints if additional easing of monetary policy is required from the Bank of Canada.

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.

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Upcoming Economic Events that you should be monitoring:

Monday, August 24, 2015