USD/CAD Fundamental Analysis January 7, 2014 Forecast

Analysis and Recommendations:

The USD/CAD is flat as the North American session gets underway trading at 1.0637 with traders waiting for the release of ISM manufacturing data later in the day. Tomorrow’s calendar is full of Canadian data which should see the CAD volatile. The minutes of the U.S. Federal Reserve’s December policy meeting will be released on Wednesday. Central bank policy makers decided at that meeting that they would begin to pare stimulus, and cut asset purchases by $10 billion to $75 billion a month. The minutes could hint at the timing and pace of any further reductions to the Fed’s stimulus.

Friday will bring the December U.S. payrolls report, which could suggest whether domestic job growth is strong enough for the Fed to continue tapering its asset buying.

Currently, there is no expectation of an interest rate hike or cut priced into the Canadian 1‐year OIS market. As inflation has dropped below the 1% to 3% inflation control range, Governor Poloz has shifted to a more dovish stance. Inflation is likely to be the most important data print for judging the path of interest rates in Canada and the outlook for CAD. Domestic data on average came in stronger than expected in December—similar to the US; accordingly any upward shift in inflation would shift the Canadian dollar outlook

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 January 6, 2014 actual v. forecast

 

Upcoming Economic Events that affect the EUR, GBP, CAD and USD