USD/CAD Fundamental Analysis – August 26, 2015 – Forecast

Analysis and Recommendations:

The USD/CAD fell 74 points to trade at 1.3214 as oil recovered a bit and markets took a breather after the PBOC injected additional liquidity. Yesterday’s trading session brought a day of almost unprecedented shocks and volatility in the global markets. You would have to go back to the autumn of 2008, during the height of the global financial crisis, with the demise of erstwhile US investment banking behemoth Lehman Brothers, to witness price action on this scale.

When the Dow Jones index opened for business in the States, the full extent of the global flight to safety became completely evident – America’s benchmark equities index plunged by a heady 1089 points – its greatest ever points drop on opening. Meanwhile, on the other side of the Atlantic, Europe’s leading exchanges followed America’s lead and continued their journey South. The destination for London’s benchmark FTSE 100 index was a closing level below 6,000 points for the first time since the start of 2013. The plunge of 4.6% on the day for the FTSE was eclipsed by even greater losses for the euroland’s bourses.

The driver for the move was simple – risk aversion on a mass scale from investors fearing the worse regarding the increasingly evident slowdown in Chinese economic activity. However, investors hoping that the Pound Sterling will record further gains against the Australian Dollar, New Zealand Dollar and the Canadian Dollar should be mindful that the sharp drop in risk sentiment and oil prices makes any tightening of monetary policy by the world’s leading central banks a lot less likely in the short to medium term.

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:

Wednesday, August 26, 2015

Government Bond Auctions

Date Time Country

Aug 25 00:00 UK Announces details of Jan 2021 gilt

Aug 25 17:30 Italy Announces details of BTP/CCTeu on 28 Aug

Aug 25 19:00 US Holds 2-year note auction

Aug 26 11:10 Italy Eur 3bn 0.15% Aug 2017 CTZ

Aug 26 19:00 US Holds 2-year FRN note auction

Aug 26 12:05 Norway Holds bond auction

Aug 26 19:00 US Holds 5-year note auction

Aug 26 19:00 US Holds 2-year FRN auction

Aug 27 11:03 Sweden Sek 0.5bn 0.125% I/L Jun 2019, Sek 0.5bn 1% Jun 2025 bonds

Aug 27 19:00 US Holds 7-year note auction

Aug 28 11:10 Italy Auctions BTPs/CCTeus

Sep 01 11:15 Austria Holds RAGB bond sale

Sep 01 00:00 UK Announces details of 3.5% 2045 Gilt

Sep 02 11:03 Sweden Holds bond auction

Sep 02 11:30 Germany Eur 4bn 0.25% Oct 2020 Bobl

Sep 02 11:30 UK Auctions new Jan 2021 Gilt

Sep 03 10:30 Spain Auctions Bonos/Obligaciones

Sep 03 11:10 France Auctions OATs

Sep 03 00:00 US Announces details of 3yr note on 08 Sep, 10yr note on 09 Sep

Sep 03 00:00 US Announces details of 10-year note on 09 Sep