USD/CAD Fundamental Analysis September 17, 2013 Forecast

Analysis and Recommendations:

The USD/CAD continued to decline as the US dollar tumbled with the pair trading at 1.03 down by 54 points. The CAD is strong, up 0.5%, reacting to Larry Summers’ decision to withdrawal his candidacy for next Fed Chair. USDCAD is trading at a one and a half month low and close to its average ytd level of 1.0230. Today’s international securities transaction is expected to show flows into Canada of $8bn in July, partially reversing the $15bn negative flow in June. The CAD positive flows from both reserve managers and investors helped to support CAD in 2011 and 2012; however these have subsided in 2013 taking away an important driver of CAD strength. Rising household debt is likely to see BoC turn more hawkish in turn supporting the CAD. Household debt to disposable income rose to a new record high in the second quarter of 163.4%, led by mortgage debt while recent housing data has shown only a modest moderation in pricing. The combination of which raises the financial stability risk in Canada, closely watched by the BoC. Traders can expect that Governor Poloz will see this as a significant concern and like Mark Carney before him will increase the hawkish rhetoric to warn consumers that interest rates in Canada will be moving higher.

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 September 16, 2013 actual v. forecast

 

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

Government Bond Auction

Date Time Country 

Sep 17 08:30 Spain

Sep 17 09:30 Belgium

Sep 18 09:10 Sweden

Sep 18 09:30 Germany

Sep 18 09:30 Portugal

Sep 19 08:30 Spain

Sep 19 08:50 France

Sep 19 09:30 UK

Sep 19 09:50 France

Sep 19 15:00 US

Sep 19 17:00 US

Sep 20 15:30 Italy