USD/CAD Fundamental Analysis January 22, 2014 Forecast

Analysis and Recommendations:

The USD/CAD broke the 1.10 price level today as the US dollar continued its climb as traders are now expecting the FOMC to increase its tapering next week. The Loonie lost all support as gold and crude oil traded on the low side. The dollar rose the most in a week against the CAD on bets the Federal Reserve will further scale back stimulus. The U.S. currency advanced against all but one of its 16 major counterparts before reports this week that economists said will show manufacturing growth accelerated while existing-home sales rebounded. The greenback strengthened to the most against the Canadian dollar since 2009.

The Markit Economics preliminary index of U.S. manufacturing climbed to 55 this month from 54.4 in December, according to the median estimate of analysts surveyed by Bloomberg News before the figure is published on Jan. 23. The National Association of Realtors may say on the same day sales of previously-owned homes climbed 1 percent last month after a 4.3 percent drop in November.

The number of Americans continuing to receive jobless benefits fell to 2.9 million in the period ended Jan. 11 from 3 million, according to the median estimate of economists surveyed by Bloomberg before the Labor Department data on Jan. 23.

Canada reports wholesale trade and manufacturing sales for November, which are not typically market movers, especially ahead of the Bank of Canada meeting on Wednesday. Given substantial short Canadian dollar positions, which in the futures stand at a record.

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Economic Data January 21, 2012 actual v. forecast

 

Upcoming Economic Events that affect the EUR, GBP and USD

Government Bond Auction

Date Time Country 

Jan 22 10:30 Germany

Jan 23 01:30 Japan

Jan 23 10:03 Sweden

Jan 23 10:30 UK

Jan 23 11:00 France

Jan 23 16:00 US