USD/CAD Fundamental Analysis February 11, 2015 – Forecast

Analysis and Recommendations:

The USD/CAD gained 25 points to trade at 1.2492 as the dollar regained some losses and the CAD dipped as oil prices declined. Gold is also trading in the red. Lackluster inflation data from China is holding down the commodity currencies in today’s trading.  Nerves over Greece’s future in the euro and the conflict in Ukraine dragged on European markets on Tuesday, while bets on the likelihood of a U.S. interest rate hike nudged the dollar higher and oil prices held steady after a rebound.

Chinese inflation data had again shown signs of weakness in the world’s No. 2 economy as consumer price inflation hit a five-year low of 0.8 percent year-on-year in January. It adds to a huge global trend which is pressing central banks in many parts of the world to lower interest rates or turn to unconventional policy stimulus again. “This will likely be the low point for CPI inflation given that oil is rebounding. Still, the data will increase rate cut expectations and we see a cut in March,” Credit Agricole senior economist in Hong Kong, Darrius Kowalczyk, said.

According to a draft communique from leaders of the Group of 20 (G20) countries meeting in Istanbul, they will pledge to act decisively on monetary and fiscal policy, if needed, to combat the risk of persistent stagnation. The United States, however, strongly underlined at the meeting that countries should not to use their currencies to try to boost exports, one U.S. Treasury official said in a thinly veiled reference to what is fast becoming a global currency war.

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 actual vs. forecast:

 

Upcoming Economic Events that you should be monitoring:

Wednesday, February 11^th

Euro Group Meeting Set To Begin Discussion On Greece

Government Bond Auctions

Date                Country

Feb 11             Sweden Holds bond auction

Feb 11             Germany Eur 5bn Mar 2017 Schatz

Feb 11             US Auctions 10-yr Notes

Feb 12             Italy Auctions BTPs/CCTeu

Feb 12             UK Auctions conventional Gilt

Feb 12             US Announces 30-yr TIPS auction on Feb 19

Feb 12             US Auctions 30-yr Bonds