USD/CAD Fundamental Analysis – October 14, 2015 – Forecast

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Published: Oct 13, 2015, 10:40 GMT+00:00

Analysis and Recommendations: The USD/CAD soared 58 points to trade at 1.3055 as gold and oil prices fell from highs on Monday mid-day trading. The dollar

Analysis and Recommendations:

The USD/CAD soared 58 points to trade at 1.3055 as gold and oil prices fell from highs on Monday mid-day trading. The dollar remains flat with little data today, while traders try to decipher all the Fed speak on Monday. The fortunes of the loonie are very much tied to the outlook for crude because the energy patch is responsible for generating over 6% of Canada’s GDP and 14% of the total value of its exports. The West Texas Intermediate—the benchmark North American oil price—has plunged by over 50% since the start of 2015, dragging down the value of the loonie. The greenback came under renewed pressure on Monday with the pair was seen near ten-week lows, changing hands at around C$1.2920 and below the important psychological handle of C$1.30.

Traders have been reducing their US dollar exposure since the disappointing September payrolls and somewhat dovish FOMC minutes, which led to a broad correction on US dollar pairs.

The Loonie was further supported by rising oil prices, with the WTI benchmark rising above the $50 mark and seen near three-month highs on Monday.

The Canadian dollar will also face political risk if Conservative Prime Minister Stephen Harper does win a convincing majority in the Federal election. Canada will no longer attract cross-border capital from China in debt-financed energy and mining acquisitions, another component of loonie strength until early-2014. Moving ahead, investors will pay close attention to Canada’s existing home sales data for September, to be released later this 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.

Today’s economic releases:


JPY	BoJ Policy Meeting Minutes
AUD	NAB Business Confidence	4	5
CNY	Balance of Trade	$46.79B	$60.34B
CNY	Exports YoY	-6.3%	-3.7%
CNY	Imports YoY	-15%	-20.4%
JPY	BoJ Monthly Report
JPY	Consumer Confidence		40.6
EUR	Inflation Rate YoY Final	0%	0%
GBP	Core Inflation Rate YoY	1.1%	1.0%
GBP	Inflation Rate YoY	0%	-0.1%
GBP	Inflation Rate MoM	0%	-0.1%
EUR	ZEW Economic Sentiment	6	1.9
EUR	ZEW Current Conditions	64.7	55.2
USD	Fed Bullard Speech

Upcoming Economic Events that you should be monitoring:

Wednesday, October 14, 2015

Cur.	Event	Actual	Forecast	Previous
CNY	CPI (YoY) (Sep)		1.8%	2.0%
GBP	Average Earnings Index +Bonus (Aug)		3.1%	2.9%
GBP	Claimant Count Change (Sep)		-2.1K	1.2K
USD	Core Retail Sales (MoM) (Sep)		-0.1%	0.1%
USD	PPI (MoM) (Sep)		-0.2%	0.0%
USD	Retail Sales (MoM) (Sep)		0.2%	0.2%