USD/CAD Fundamental Analysis July 24, 2014 Forecast

Analysis and Recommendations:

The USD/CAD is down 16 points as the CAD recovered a bit against the strong US dollar ahead of today’s retail sales release in Canada. The pair is trading at 1.0721. The loonie edged higher recovering yesterday’s losses, off early lows as the U.S. Labor Department reported that the consumer price index rose 0.3 per cent in June, which matched the expectations of economists.

Analysts note that readings on U.S. inflation are considered key these days to get a clue as to when the Federal Reserve might start hiking rates since the American employment situation has improved so much over the last few months. There had been speculation that a higher than expected inflation reading would have pulled forward expectations for such rate hikes.

Scotiabank’s Camilla Sutton observed in a commentary Tuesday that Fed funds futures are pricing in a conservative July 2015 interest rate hike, while “our Scotiabank house view is for Q215.”

“There has been a bit of back and forth with expectations for the first interest rate hike with it being pulled forward and then pushed back,” said Sutton, chief FX strategist and managing director, Scotiabank Global Banking and Markets.

Many analysts expect the Bank of Canada could also begin hiking rates next summer.

Meanwhile, geopolitical concerns eased somewhat while traders continued to consider the impact of potentially tighter economic sanctions against Russia for its support of Ukrainian rebel militias accused of shooting down a Malaysian airliner last week.

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 July 23, 2014 actual v. forecast

 

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

Government Bond Auction

Date Time Country 

Jul 24 15:00 US

Jul 24 15:30 Italy

Jul 24 17:00 US

Jul 25 15:30 Italy