USD/CAD Fundamental Forecast – September 16, 2016

The USD/CAD is trading at 1.3197 as the Canadian dollar remains weak with low gold prices and oil prices well below their average trading range. The strength of the US dollar weighs on the weak Loonie after lackluster economics data over the past week. Benchmark U.S. crude gained 43 cents to $44.01 per barrel in trading the New York Mercantile Exchange. The contract plunged $1.32 on Wednesday to finish at $43.58 a barrel in New York. Brent crude, used to price international oils, added 53 cents to $46.38 in London. It fell $1.25 the previous session to $45.85.

The Loonie has very little reasons to go bid. Recently, the Bank of Canada note that the risks for inflation had, “tilted somewhat to the downside.” The lower inflation expectations align with the weaker economic data coming from Canada and the potential for a re-emergence of policy divergence, and current account divergence from Canada from other developed economies.

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Upcoming Economic Events that you should be monitoring:

 September 16, 2016

Government Bond Auctions

Date Time Country Auction

Sep 15 10:30 Spain 0.75% Jul 2021 Bono, 1.3% Oct 2026 bond & 1.95% Jul 2030

Sep 15 10:50 France Eur 5-6bn 0% Feb 2019 & May 2021 OATs

Sep 15 11:03 Sweden Sek 0.5bn 0.125% Jun 2019 I/L & Sek 0.5bn 4% Dec 2020 I/L

Sep 15 11:50 France Eur 0.75-1.25bn 0.1% Mar 2021 & Mar 2025 OAT

Sep 19 11:00 Belgium Holds OLO auction

Sep 20 11:30 UK Jul 2047 Gilt

Sep 21 10:30 Denmark Holds bond auction

Sep 21 11:03 Sweden Holds bond auction

Sep 21 11:30 Germany Eur 4bn 0% Oct 2021 Bobl

Sep 22 17:20 Italy Announces details of bond auction