USD/CAD Fundamental Analysis – August 31, 2015 – Forecast

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Published: Aug 28, 2015, 14:19 UTC

Analysis and Recommendations: The USD/CAD soared 96 points to 1.3296 coming close to its highest level. The US dollar continued to recover while oil gave

Analysis and Recommendations:

The USD/CAD soared 96 points to 1.3296 coming close to its highest level. The US dollar continued to recover while oil gave back a bit of yesterday’s gains but the Loonie seems lost.

Minutes from a meeting of Federal Reserve policy makers released on Aug. 19 kicked off a period of weakness in the dollar, as investors pushed back their expectations for the timing of the first Federal Reserve interest-rate increase since 2006. The minutes showed policy makers were second-guessing whether an interest-rate hike in September would be appropriate, given persistently low inflation in the U.S. Central bankers meeting in Jackson Hole Friday and Saturday are searching for explanations on why inflation is staying so low.

Then, a stock-market selloff that began last week ended with the largest string of losses since the financial crisis, cementing the idea that the Fed would wait until December — or possibly until next year — before approving the first interest-rate increase since 2006.

The dollar is sensitive to investors’ interest-rate hike expectations, because higher interest rates would increase the return on assets denominated in dollars, making the U.S. currency more attractive to foreign investors.

The Canadian dollar was down one-third of a cent and U.S. market futures were negative before North American stock markets opened Friday. The Dow Jones industrial futures were down 106.0 points at 16,544.0 before markets opened while the Nasdaq futures fell 26 points to 4,302.0, and the S&P 500 futures declined 13.5 points to 1,975,8.

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
JPY	Household Spending (YoY) (Jul)	-0.2%	1.3%	-2.0%
JPY	Household Spending (MoM) (Jul)	0.6%	2.2%	-3.0%
JPY	Jobs/applications ratio (Jul)	1.21	1.19	1.19
JPY	National Core CPI (YoY) (Jul)	0.0%	-0.2%	0.1%
JPY	Tokyo Core CPI (YoY) (Aug)	-0.1%	-0.2%	-0.1%
JPY	Retail Sales (YoY) (Jul)	1.6%	1.1%	0.9%
CHF	GDP (YoY) (Q2)	1.2%	0.9%	1.2%
CHF	GDP (QoQ) (Q2)	0.2%	-0.1%	-0.2%
EUR	Spanish CPI (YoY) (Aug)	-0.4%	-0.1%	0.1%
EUR	Spanish HICP (YoY) (Aug)	-0.5%	-0.2%	0.0%
GBP	Business Investment (QoQ) (Q2)	2.9%	1.7%	2.0%
GBP	GDP (YoY) (Q2)	2.6%	2.6%	2.6%
GBP	GDP (QoQ) (Q2)	0.7%	0.7%	0.7%
EUR	German CPI (MoM) (Aug)	0.0%	-0.1%	0.2%
USD	Core PCE Price Index (YoY) (Jul)	1.2%	1.3%	1.3%
USD	Core PCE Price Index (MoM) (Jul)	0.1%	0.1%	0.1%
USD	Goods Trade Balance (Jul)	-59.12B		-62.26B
USD	Personal Spending (MoM) (Jul)	0.3%	0.4%	0.3%
CAD	RMPI (MoM) (Jul)	-5.9%	-4.0%	0.2%

Upcoming Economic Events that you should be monitoring:

Monday, August 31, 2015

Cur.	Event	Actual	Forecast	Previous
	United Kingdom – Summer Bank Holiday
NZD	Building Consents (MoM) (Jul)			-4.1%
JPY	Industrial Production (MoM) (Jul)			1.1%
AUD	HIA New Home Sales (MoM) (Jul)
AUD	Company Gross Operating Profits			0.2%
AUD	Private Sector Credit (MoM) (Jul)			0.4%
CHF	KOF Leading Indicators (Aug)			99.8
EUR	CPI (YoY) (Aug)		0.2%	0.2%
CAD	Current Account (Q2)			-17.5B
USD	Chicago PMI (Aug)		54.5	54.7