USD/CAD Fundamental Forecast – September 5, 2016

The USD/CAD fell 68 points to 1.3034 after US jobs data missed expectations while the Canadian trade balance reported better than expected offsetting last month’s poor report. Gold soared and oil remained in the green helping the Loonie to rally immediately. Investors are evaluating today’s US job report, especially after US Federal Reserve chair Janet Yellen said last week that a solid performance in the labor market has strengthened the case for an interest rate hike.

Some Federal officials have hinted that a rate hike could come as early as this month, but analysts have said the Fed will likely wait until December, due to the upcoming US presidential elections in November and inflation rates running below its two per cent goal.

Oil prices rebounded on Friday as traders fished for bargain crude after the previous day’s heavy losses, and eyed an upcoming meeting to tackle a global supply glut. The market had dived Thursday after Russia suggested it may not be necessary to limit output, denting hopes for its gathering with OPEC producers in Algeria later this month.

Russian President Vladimir Putin has meanwhile urged compromise to find agreement on an oil production freeze to combat a global supply glut.

“We consider that it is the right decision for world markets, that’s the first thing,” Putin told Bloomberg News in an interview released Friday.

Crude oil has lost one tenth of its value from its August peaks, making the commodity ripe for traders seeking bargains.

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 September 5, 2016

Government Bond Auctions

Date Time Country Auction

Sep 06 11:00 Austria Holds bond auction

Sep 06 11:30 UK 1.5% 2026 Gilt

Sep 06 11:30 Germany Holds I/L bond auction

Sep 07 10:30 Denmark Holds bond auction

Sep 07 11:03 Sweden Holds bond auction

Sep 07 11:30 Germany Eur 5bn 0% Aug 2026 Bund

Sep 08 11:00 Ireland Holds bond auction

Sep 08 17:20 Italy Announces details of bond auction