USD/CAD Weekly Fundamental Analysis December 10 – 14, 2012, Forecast

Introduction: The Canadian Dollar moves in reaction to the US Dollar. Movements are small and easy to track and trade. The Canadian Dollar also responds to economic reports within Canada. It has little action against foreign currencies except during major moves or crisis.

The USD/CAD is the single biggest beneficiary of rising oil prices. Canada which is already the biggest exporter of oil to the US will experience a boost to its economy when oil price continue to increase. Therefore, if oil rises the Canadian dollar is likely to follow. Over the past years, the correlation between the Canadian dollar and oil prices has been approximately 81%. 

Weekly Analysis and Recommendation:

The USD/CAD had an active week ending at 0.9886 after opening on Monday at 0.9938. The US dollar gained momentum against its crosses except here at the end of the week. The CAD seemed to benefit as much as the US dollar from positive eco data in the US. The CAD was weakened by falling gold and oil prices this week. Though the Bank of Canada continue to hold its key lending rate and policies, which supported the CAD as the BoC maintained their hawkish unwavering view.

The CAD saw strong building and employment numbers with a disappointing IVEY PMI at the end of the week. Canadian markets may be impacted more by developments abroad — particularly the US through the fiscal cliff debate — than anything on the domestic front.  The FOMC meet might make for substantial volatility in the beginning of the week.

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 recent analysis and information in our weekly reports and we provide daily updates and outlooks.

Major Economic Events for the week actual v. forecast for the Canadian & US Dollar

Historical: From 2010 to present

Highest: 1.0853 CAD on May 25, 2010.

Average: 1.0090 CAD over this period.

Lowest: 0.9407  CAD on Jan 26, 2011.

 

Economic Highlights of the coming week that affect the American and Canadian Markets

Government Bond Auction

Date Time Country 

Dec 10 10:10 Norway 

Dec 10 10:10 Slovakia 

Dec 10 15:30 UK 

Dec 10 16:30 Italy  

Dec 11 09:30 Spain 

Dec 11 10:10 Greece 

Dec 11 10:15 Austria 

Dec 11 10:30 Belgium 

Dec 11 10:30 UK 

Dec 11 18:00 US 

Dec 12 10:10 Italy  

Dec 12 10:10 Sweden 

Dec 12 10:30 Swiss 

Dec 12 16:30 US 

Dec 13 01:30 Japan 

Dec 13 09:30 Spain 

Dec 13 10:10 Italy  

Dec 13 10:30 UK 

Dec 13 16:00 US 

Dec 13 18:00 US 

Dec 14 11:00 Belgium 

Dec 14 15:30 UK