USD/CAD Fundamental – November 18, 2015 – Forecast

Analysis and Recommendations:

The USD/CAD dipped 13 points but remains near its highest level at 1.3319. The US dollar continues its Fed inspired rally now that safe haven trades tune down. The US dollar turned in a mixed performance in the week after the strong jobs data boosted expectations that the Fed’s lift-off would take place next month.  The Fed funds futures imply a 20.5 bp effective rate in December.  At the end of October, it was 19.5 bp.  In contrast, the 2-year note yield eased 3 bp over the past week to 85 bp, which is still 13 bp above where it closed last month.

One should expect the lack of much follow through dollar buying, as the strong rally had left the greenback a bit stretched technically and the news stream failed to provide significant information.  The Fed’s leadership gave no reason to think that liquidity conditions in the middle of next month would stay their hand, barring no important economic or financial surprises. 

Oil prices continued to decline weighing heavily on the Canadian dollar while gold gave up its safe haven gains and is now trading lower than it was before the terrorist act in Paris.

Starting in mid-December, the Canadian dollar is widely expected to face a substantial amount of downside pressure. On Dec. 16, the U.S. Federal Reserve, or central bank for the United States, will make its next decision on interest rates in that country.

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports.

Today’s economic releases:

 

Upcoming Economic Events that you should be monitoring:

Wednesday, November 18, 2015

Government Bond Auctions

Date Time Country

Nov 18 11:30 Germany New Eur 5bn Dec 2017 Schatz

Nov 18 11:30 UK 2% 2025 Gilt auction

Nov 18 11:30 Portugal Eur 1-1.25bn; bond auction

Nov 18 16:30 Sweden Announces details of Bond on 25 Nov

Nov 18 N/A Holland Announces details of Bond on 24 Nov

Nov 19 10:30 Spain 0.25% Apr 2018 Bono, 1.15% Jul 2020 Bono, 5.4% Jan 2023

Nov 19 10:50 France Eur 7-8bn; 4.25% Oct 2018 OAT, 0.25% Nov 2020 OAT, 2.25%

Nov 19 11:50 France Eur 1-1.5bn; 0.25% Jul 2024, 1.85% Jul 2027, 3.15% Jul 2032

Nov 19 N/A US Holds 10-year TIPS auction

Nov 20 16:30 Italy Announces details of CTZ/BTPei on 25 Nov

Nov 23 12:00 Belgium Auctions OLOs

Nov 23 N/A US Holds 2-year note auction

Nov 24 17:30 Italy Announces details of BTPs/CCTeu on 27 Nov

Nov 24 N/A Holland Eur 1.0-2.0bn 0.25% Jul 2025 DSL

Nov 24 N/A US Holds 5-year note auction

Nov 25 11:03 Sweden Holds bond auction

Nov 25 11:10 Italy Auctions CTZ/BTPei

Nov 25 11:30 Germany Eur 3bn 1.0% Aug 2025 Bund

Nov 25 N/A US Holds 2-year FRN auction

Nov 25 N/A US Holds 7-year note auction

Nov 26 11:03 Sweden Holds bond auction

Nov 27 11:03 Sweden Holds bond auction

Nov 27 11:10 Italy Auctions BTPs/CCTeus