USD/CAD Fundamental Forecast – September 6, 2016

The USD/CAD tumbled 35 points with both markets on holiday. The pair is trading at 1.2935 as the US dollar continues to ease on Fed expectations as markets continue to react to the jobs report on Friday.

The big events for Canadian traders this week is the BoC rate decision and the jobs report. he Bank of Canada will likely keep interest rates unchanged for even longer than had been anticipated as a lack of momentum in the economy has prompted analysts to push further their expectations for a hike to 2018, a Reuters poll found.

The central bank is unanimously expected to hold rates at 0.50 percent when it makes its next policy announcement Sept. 7. According to the median forecast of 35 economists, the central bank is now likely to wait until the first quarter of 2018 before hiking rates to 0.75 percent. It had earlier been forecast in a July poll to raise rates in the final quarter of 2017.

Canada, a major oil exporter, was hit by the slump in crude prices last year and its economy has struggled to sustainably regain momentum since it was in a brief recession in 2015.

The Canadian economy lost 31,200 jobs in July amid a sharp decline in full time jobs. The reading was contrary to analysts’ forecast of a 10,100 job gain. The unemployment rate inched up to 6.9% from 6.8% in June, in line with market forecast. The number of full-time workers declined by 71,400 the biggest one-month drop since October 2011. This month Friday’s report is expected to show a climb of just 3200 jobs.

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Upcoming Economic Events that you should be monitoring:

 September 6, 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