USD/CAD Fundamental Analysis December 12, 2012, Forecast

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Updated: Aug 21, 2015, 00:00 UTC

Analysis and Recommendations: The USD/CAD is trading at 0.9868 as the US dollar gained against the Looney, reversing the course of the rest of the

USD/CAD Fundamental Analysis December 12, 2012, Forecast

Analysis and Recommendations:

The USD/CAD is trading at 0.9868 as the US dollar gained against the Looney, reversing the course of the rest of the crosses. Both the US and Canada released their trade balance numbers today both beating market expectations. The American currency weakened ahead of an expected announcement of further economic stimulus by the U.S. Federal Reserve. Such a move would involve the Fed printing additional money to buy up more bonds.

Economists expect that the Fed will announce at the end of its two-day meeting Wednesday that it will begin buying US$40 million of long-term treasury securities each month.

This would be on top of an existing plan announced in September that involves the Fed buying $40 billion per month in mortgage-backed securities.

The Fed’s US$400-billion stimulus program known as Operation Twist is set to expire after 2012. It involved the Fed buying $400-billion of longer-term Treasuries and simultaneously selling some of the shorter-dated issues it already held in order to bring down long-term interest rates.

Traders also took in data suggesting Germany will be able to avoid slipping into recession as an index of investor optimism rose more than expected in December.

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.

Economic Data December 11, 2012 actual v. forecast

Date	Currency	Event	Actual	Forecast	Previous
Dec. 11	GBP	RICS House Price Balance	-9%	-7%	-7%
	AUD	NAB Business Confidence	-9		-1
	EUR	French Non-Farm Payrolls (QoQ)	-0.3%	-0.3%	-0.3%
	INR	Indian Trade Balance	-19.3B	-19.1B	20.9B
	ZAR	South African Retail Sales (YoY)	1.00%	4.00%	4.70%
	HUF	Hungarian CPI (YoY)	5.2%	5.4%	6.0%
	EUR	German ZEW Economic Sentiment	6.9	-12.0	-15.7
	EUR	ZEW Economic Sentiment	7.6	0.1	-2.6
	CAD	Trade Balance	-0.2B	-1.0B	-1.0B
	USD	Trade Balance	-42.2B	-42.6B	-40.3B

Upcoming Economic Events that affect the CAD and USD

Date	Time	Currency	Event	Forecast	Previous
Dec. 12	13:30	USD	Import Price Index (MoM)	-0.5%	0.5%
	19:00	USD	Federal Budget Balance	-147.5B	-120.0B
Dec. 14	13:30	CAD	Manufacturing Sales (MoM)		0.40%