USD/CAD Fundamental Analysis – August 28, 2015 – Forecast

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Published: Aug 27, 2015, 14:13 UTC

Analysis and Recommendations: The USD/CAD dipped 65 points to trade at 1.3228 as the greenback weakened after the pair touched a record high. The rebound

USD/CAD Fundamental Analysis – August 28, 2015 – Forecast

Analysis and Recommendations:

The USD/CAD dipped 65 points to trade at 1.3228 as the greenback weakened after the pair touched a record high. The rebound in oil prices today helped support the Loonie. Federal Reserve Bank of New York President William Dudley said Wednesday that boosting short-term rates next month looks “less compelling” in light of the market’s volatility and worrisome news out of China.

The loonie has been beaten down by the stock market turmoil and the prospect of less demand for Canadian resources from China. But going forward the main risk is the trend in interest rates.

Some analysts say it is less likely the U.S. Fed will raise rates in September because of the market meltdown. The Bank of Canada has made two rate cuts this year, helping to pressure the Canadian currency, but if the Fed doesn’t move, that could bring some relief for the Canadian dollar.

The bounce in oil prices and the recovery of the global markets is helping the Canadian dollar rebound a bit. The international glut of oil has brought oil prices lower for the past seven weeks. Output by the Organization of Petroleum Exporting Countries is at record levels and rumors that the oil cartel might hold an emergency meeting to cut back output have been refuted by Saudi Arabia.

Meanwhile, the U.S. Energy Information Agency reported that crude oil inventories decreased by 5.5 million barrels last week, but oil in storage remains at levels not seen in 80 years. At the same time, stocks of gasoline and other distillates are growing.

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
AUD	Private New Capital Expenditure	-4.0%	-2.5%	-4.7%
GBP	Nationwide HPI (MoM) (Aug)	0.3%	0.4%	0.4%
GBP	Nationwide HPI (YoY) (Aug)	3.2%	3.1%	3.5%
EUR	Spanish GDP (QoQ) (Q2)	1.0%	1.0%	1.0%
RUB	Central Bank reserves (USD)			362.9B

Upcoming Economic Events that you should be monitoring:

Friday, August 28 2015

Cur.	Event	Actual	Forecast	Previous
JPY	Household Spending (YoY) (Jul)		1.3%	-2.0%
JPY	Household Spending (MoM) (Jul)		2.2%	-3.0%
JPY	National Core CPI (YoY) (Jul)		-0.2%	0.1%
JPY	Tokyo Core CPI (YoY) (Aug)		-0.2%	-0.1%
JPY	Retail Sales (YoY) (Jul)		1.1%	0.9%
CHF	GDP (YoY) (Q2)		0.9%	1.1%
CHF	GDP (QoQ) (Q2)		-0.1%	-0.2%
EUR	Spanish CPI (YoY) (Aug)		-0.1%	0.1%
EUR	Spanish HICP (YoY) (Aug)		-0.2%	0.0%
GBP	Business Investment (QoQ)		1.7%	2.0%
GBP	GDP (QoQ) (Q2)		0.7%	0.7%
EUR	German CPI (MoM) (Aug)		-0.1%	0.2%
USD	Core PCE Price Index (MoM) (Jul)		0.1%	0.1%
USD	Goods Trade Balance (Jul)			-62.26B
USD	Personal Spending (MoM) (Jul)		0.4%	0.2%
CAD	RMPI (MoM) (Jul)		-4.0%	0.0%
USD	Michigan Consumer Expectations			83.8