Advertisement
Advertisement

USD/CAD Fundamental Analysis – August 6, 2015 – Forecast

By:
Barry Norman
Published: Aug 5, 2015, 15:07 UTC

Analysis and Recommendations: The USD/CAD eased by a few pips after hitting a 2015 high against the strong US dollar. The pair is trading at 1.3185 and

USD/CAD Fundamental Analysis – August 6, 2015 – Forecast

usdcad wednesday bns
Analysis and Recommendations:

The USD/CAD eased by a few pips after hitting a 2015 high against the strong US dollar. The pair is trading at 1.3185 and could easily move above 1.32 today. Oil continues it bearish trend while gold remains in its recent down trend weighing heavily on the Canadian dollar.  Following news that the Canadian economy unexpectedly contracted, there has been renewed speculation that the central bank will likely have to cut interest rates again. At the same time, the Federal Reserve has confirmed its intention to raise rates later this year, provided the labor market shows “some” more improvement.

The fact that the two central banks are moving in opposite directions is a weight on the Canadian dollar.

However, the capital flows into and out of Canada swamp the value of oil exports, which are also offset by the fact that provinces in the east import oil. In fact, the traditional pattern has been for the eastern provinces to import more expensive Brent oil, while a few western provinces export cheaper oil to the US. In 2014, Canada’s exported about $105 bln of energy products and imported about $46 bln of energy products. Let’s not forget that Canada is an important exception to the US ban on oil exports.

The importance of oil for the Canadian dollar is not just about the value of its single largest export but it is more general proxy in the current environment for the overall Canadian economy, which had become highly leveraged to oil prices.

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

 

  CNY

 

Caixin Services PMI (Jul)

53.8

52.2

51.8

 

 

  RUB

 

Markit Services PMI (Jul)

51.6

49.2

49.5

 

 

  CHF

 

CPI (MoM) (Jul)

-0.6%

-0.4%

0.1%

 

 

  EUR

 

Spanish Services PMI (Jul)

59.7

55.5

56.1

 

 

  EUR

 

German Services PMI (Jul)

53.8

53.7

53.7

 

 

  EUR

 

Markit Composite PMI (Jul)

53.9

53.7

53.7

 

 

  EUR

 

Services PMI (Jul)

54.0

53.8

53.8

 

 

  GBP

 

Services PMI (Jul)

57.4

58.0

58.5

 

 

  EUR

 

Retail Sales (MoM) (Jun)

 -0.6%

-0.3%

0.1%

 

 
                 

 

USDCAD(60 minutes)20150805064644

Upcoming Economic Events that you should be monitoring:

Thursday, August 6, 2015

Cur.

 

Event

Actual

Forecast

Previous

 

  AUD

 

Employment Change (Jul)

 

15.0K

7.3K

 

 

  GBP

 

Manufacturing Production (Jun)

 

0.2%

-0.6%

 

 

  GBP

 

BoE Inflation Report

 

 

 

 

 

  GBP

 

Interest Rate Decision (Aug)

 

0.50%

0.50%

 

 

  GBP

 

BoE MPC Meeting Minutes

 

 

 

 

 

  GBP

 

BoE Gov Carney Speaks  

 

 

     

Government Bond Auctions

Date Time Country

Aug 06 10:30 Spain Auctions Bonos

Aug 06 11:10 France Auctions OATs

Aug 10 17:30 Italy Announces details of BTP/CCTeu on 13 Aug

Aug 11 11:30 UK Auctions 0.125% 2058 I/L Gilt

Aug 12 11:30 Germany Eur 4bn Aug 2025 Bund

Aug 13 11:10 Italy Auctions BTPs/CCTeus

 

About the Author

Did you find this article useful?

Advertisement