USD/CAD Fundamental Analysis October 28, 2014 Forecast

Analysis and Recommendations:

The USD/CAD eased by 15 points to trade at 1.1226 after touching near a high on Friday. The US dollar eased a bit today ahead of the FOMC meeting tomorrow with the statement due on Wednesday. Declining oil prices continued to weigh on the Looney which has been trading near recent lows with gold remaining a bit on the low side also. The export driven currency just doesn’t seem to have any support.  Money managers are boosting bets the Canadian dollar will keep weakening. Hedge funds and other large speculators pushed net-bearish wagers on the currency to 16,167 contracts in the week ending Oct. 17, the most since June, according to the Commodity Futures Trading Commission in Washington. Investors held net-long positions as recently as Sept. 26.

Chinese GDP expansion in the three months from October is seen at 7.2 percent to 7.3 percent, which will lead full-year growth to about 7.3 percent as the fourth-quarter reading has a bigger weighting, he said. China set the 2014 GDP growth target at 7.5 percent. China’s government is holding off broad stimulus, with Premier Li Keqiang expressing a preference for policy improvements and People’s Bank of China Governor Zhou Xiaochuan vowing to stick with a prudent monetary stance.  China’s economic growth remained unchanged at 7.7 percent in 2013 and may ease to 7.3 percent this year, according to the median estimate of 51 analysts in a Bloomberg News survey.

The slide in oil, caused by a combination of oversupply and falling global demand, is a setback for Canada. Since the recession, most new business investment and jobs have come from the oil-rich province of Alberta. The nation’s trade surplus turned into a deficit in August, and economic growth stalled the previous month.

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 actual vs. forecast:

 

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