USD/CAD Fundamental Analysis – November 3, 2015 – Forecast

Analysis and Recommendations:

The USD/CAD gained 28 points to trade at 1.3108 dead center of its recent range. Traders from both sides of the borders are closely monitoring Friday’s jobs data. Gold and oil prices declined today weighing on the commodity heavy loonie.

The Federal Reserve surprised the markets with a hawkish policy statement on Wednesday. Prior to the statement, the Canadian dollar strengthened as the markets were expecting the Fed to avoid any hints about the timing of a rate hike. However, the Canadian currency coughed up these gains immediately after the Fed statement, which revived the possibility of a December hike. The Fed was clearer in its message than it has been for some time, saying that it would raise rates when there is further improvement in the US labor market and when inflation rises closer to the 2% target. The markets pounced on the following excerpt from the statement.

The U.S. greenback has gained more than 17% against its Canadian counterpart in the past year.

Canadian companies that have significant sales in the U.S. but report earnings in Canadian dollars have therefore coasted on favorable foreign exchange rates to beat earnings expectations and enjoy a hiked share price.

U.S. companies that report in U.S. dollars and have substantial global sales, conversely, have had their share prices pummeled.

“The Canadian dollar has been weaker for longer than the market expected and has dropped more than many expected,” said Thane Stenner, who manages portfolios for ultra-high-net-worth individuals at StennerZohny, which is part of Richardson GMP.

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:

 

Upcoming Economic Events that you should be monitoring:

Tuesday, November 3, 2015

Government Bond Auctions

Date Time Country

Nov 03 10:10 Austria Holds RAGB bond sale

Nov 04 15:30 Sweden Announces details of Bond on 11 Nov

Nov 04 N/A Holland Announces details of Bond on 10 Nov

Nov 05 09:30 Spain Auctions Bonos

Nov 05 09:50 France Auctions OATs

Nov 05 10:03 Sweden Holds I/L bond auction