USD/CAD Fundamental Forecast – September 7, 2016

The USD/CAD traded down 10 points as the greenback continued to ease and gold rebounded. There was little on the events calendar until the Bank of Canada rate decision and the Canadian jobs report on Friday. The pair is trading at 1.2929. The Canadian dollar advanced against its most major counterparts in European trading on Tuesday.

The loonie firmed to 1.2899 against the greenback, its strongest since August 26, from a low of 1.2933.

The loonie strengthened to 1-1/2-month highs of 1.4385 against the euro and 80.31 against the yen, off its previous lows of 1.4410 and 79.97, respectively.  The next possible resistance for the loonie may be found around 1.27 against the greenback, 81.00 against the yen and 1.43 against the euro.

Employment in the U.S. increased by less than anticipated in the month of August, according to a report released by the Labor Department on Friday. The Labor Department said non-farm payroll employment rose by 151,000 jobs in August after surging up by an upwardly revised 275,000 jobs in July.

The report also said the unemployment rate held at 4.9 percent in August, unchanged from the previous month. The unemployment rate had been expected to edge down to 4.8 percent.

Markets in the United States are holding onto modest gains in early trade Friday. Investors are now speculating that the Federal Reserve will refrain from raising interest rates at its next meeting later this month.

Last week, Fed Chair Janet Yellen said she believes the case for raising rates has strengthened in recent months but stressed that policy decisions always depend on the degree to which incoming data continues to confirm the central bank’s outlook.

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Upcoming Economic Events that you should be monitoring:

 September 7, 2016

Government Bond Auctions

Date Time Country 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