USD/CAD Weekly Fundamental Analysis – July 13-17, 2015 – Forecast

Weekly Analysis and Recommendation: 

The USD/CAD ended the week at 1.2658 falling 50 points on Friday as oil prices climbed and gold held steady. The US dollar weakened as safe haven trades eased on an imminent deal between Eurozone creditors and Greece.

The US dollar barely moved as the text of Yellen’s speech was released. That could change in her Q&A or as the speech is analyzed but I haven’t seen anything in the headlines that argues for a trade, especially with Greece and China dominating the conversation.

n a research note published Thursday, July 9th, the chief economist for Gluskin Sheff warned investors to be cautious on the Loonie. Today, the Canadian dollar trades at 79 cents per U.S. dollar. However, in his report, Rosenberg concluded that trader sentiment could send the CAD/USD exchange rate to as low as $0.69.

“We may be only one-fifth of the way into that overshoot process—that is my major point,” he wrote. Rosenberg actually believes the Loonie is approximately three percent below its fair-value. However, investors’ emotions can often send exchange rates far beyond their true intrinsic value.

Lower commodity prices are another headwind. The Loonie enjoyed appreciation during the rise of oil prices. But a major slowdown in China will likely cause demand for Canada’s raw resources to be dialed back.

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.

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