USD/CAD Fundamental Analysis – October 27, 2015 – Forecast

Analysis and Recommendations:

The USD/CAD dipped 24 points to trade at 1.3143 soaring from its lowest point last week. The CAD had gained momentum but lost everything on Thursday after Mr. Draghi sent the euro falling and the dollar climbing. Oil prices continue to decline while gold is within the top of its range. e forward move for the Canadian unit was provided with further fuel this afternoon with the announcement from the People’s Bank of China (PBoC) that it was trimming its headline interest rate to a relatively lowly 4.35% with immediate effect.

The PBoC explained the cut of 25 basis points on the fact that the drop in the pace of price rises in China has caused CPI inflation to become out kilter with the nation’s growth rates.

The timing of the PBoC’s announcement – it was made during the middle of the night after Friday’s Shanghai equities market close – alarmed some investors who viewed it as a panic measure. Others viewed it as not sufficiently bold to stop China’s economy from suffering a ‘hard landing’.

Investors inferred from these words that, given the continued deflation in the eurozone, the euroland’s reserve bank might be about to extend the scope of its Quantitative Easing program.

The promise of an extension of ultra-loose money from one of the world’s premier central banks helped fuel a surge of support for the Commodity Dollars including the Canadian Dollar.

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, October 27, 2015

Government Bond Auctions

Date Time Country

Oct 26 12:00 Norway Details bond auction on 28 Oct

Oct 26 10:30 Germany Eur 1.5bn 12M (Oct 2016) Bubills

Oct 26 16:30 Italy Announces details of BTP/CCTeu on 29 Oct

Oct 27 09:30 UK 2% 2025 Gilt auction

Oct 27 10:10 Italy Auctions CTZ/BTPei

Oct 27 n/a Holland Eur 1.5-2.5bn DSL

Oct 27 16:00 US Holds 2-year note auction

Oct 28 10:03 Sweden Holds bond auction

Oct 28 11:15 Norway Holds bond auction

Oct 28 10:30 Germany Eur 3bn 1% Aug 2025 Bund

Oct 28 16:00 US Holds 2-year FRN auction

Oct 28 16:00 US Holds 5-year note auction

Oct 29 10:10 Italy Auctions BTPs/CCTeus

Oct 29 16:00 US Holds 7-year note auction