USD/CAD Fundamental Forecast – September 14, 2016

The USD/CAD gained 97 points to trade at 1.3138 as oil prices continued to fall and oil prices eased farther. The US dollar gained 30 points as it looks like the FOMC might increase rates next week. Federal Reserve Governor Lael Brainard called for “prudence” in the timing of the removal of policy accommodation in what was the last Fed comment ahead of the quiet period into next week’s FOMC meeting. The argument over the timing of a rate rise seems to have come down to whether low unemployment levels pose an inflation risk. With futures-implied probability of a rate hike in September close to just 20 percent, it seems investors are becoming more convinced that inflation risk will not manifest for some time yet.

The roller-coaster in crude continues, with the price of a barrel of West Texas Intermediate for October delivery dropping to $45.16 to wipe out all of yesterday’s gains.

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Upcoming Economic Events that you should be monitoring:

 September 14, 2016

Government Bond Auctions

Date Time Country Auction

Sep 13 11:00 Netherlands Eur 2-3bn 0% Jan 2022 DSL

Sep 13 11:10 Italy Holds bond auction

Sep 14 11:05 Norway Holds bond auction

Sep 14 11:30 UK 0.125% 2046 I/L Gilt

Sep 14 11:30 Germany Eur 1bn 2.5% Jul 2044 Bund

Sep 15 10:30 Spain Holds bond auction

Sep 15 11:03 Sweden Holds I/L bond auction

Sep 15 11:50 France Holds bond auction