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USD/CAD Weekly Fundamental Analysis July 14-18, 2014 Forecast

By:
Barry Norman
Updated: Aug 24, 2015, 05:00 GMT+00:00

Weekly Analysis and Recommendation:  The USD/CAD eased this week as the US dollar gave up gains from the prior week after the US nonfarm payroll report.

USD/CAD Weekly Fundamental Analysis July 14-18, 2014 Forecast

USD/CAD Weekly Fundamental Analysis July 14-18, 2014 Forecast
USD/CAD Weekly Fundamental Analysis July 14-18, 2014 Forecast
Weekly Analysis and Recommendation: 

The USD/CAD eased this week as the US dollar gave up gains from the prior week after the US nonfarm payroll report. The pair ended at 1.0636. Analysts are looking for Canadian inflation to stay at 2.3% y/y on a 0.1% m/m increase in June. 

The catalysts for the modest increase are: 

a) A 0.5% increase in gasoline prices at the pump, 

b) Upward pressure in commodity food prices earlier in the year which could still pass through into inflation. Seasonal categories are fairly mixed on the month, with recreation prices having a tendency to rise modestly while clothing prices generally fall precipitously. 

Traders are expecting the impact from clothing price discounting to exceed upward pressure in recreation prices, particularly as price declines in clothing were less pronounced than normal in May, and so have further to fall in June. Pass through from the depreciation of the currency earlier in the year is still a risk, though that will diminish as the year continues given current USDCAD levels. 

Date

Last

Open

High

Low

Change %

Jul 11, 2014

1.0636

1.0650

1.0650

1.0631

-0.13%

Jul 10, 2014

1.0650

1.0650

1.0676

1.0645

0.00%

Jul 09, 2014

1.0650

1.0672

1.0684

1.0641

-0.21%

Jul 08, 2014

1.0672

1.0682

1.0695

1.0662

-0.10%

Jul 07, 2014

1.0683

1.0653

1.0686

1.0631

0.28%

 

Manufacturing sales could come in red hot after trade data for May pointed to strong gains across a variety of export categories: auto shipments were up by 9.8% m/m in the trade data and shipments of (and prices for) finished petroleum products were strong too.  

Overall manufacturing new orders have been trending down after a spike in February surrounding a lumpy defense goods order (+17.6% on the month…) but there are still enough orders in the pipe to keep the manufacturing sector busy on the month. We’re anticipating a 1.5% m/m number.  

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.

Historical: From 2011 to present

Highest: 1.0905 CAD on Jul 11, 2014

Average: 1.0042 CAD over this period

Lowest: 0.9407 CAD on Jul 26, 2011

USDCAD(60 minutes)20140711151628

Major Economic Events for the week of July 7-11 actual v. forecast for the Canadian & US Dollar

Date

Currency

Event

Actual

Forecast

Previous

Jul. 07 

CAD

Building Permits (MoM) 

13.8%

3.1%

2.2%

 

CAD

Ivey PMI 

46.9

52.5

48.2

 Jul. 08

USD

JOLTs Job Openings 

4.64M

4.53M

4.46M

Jul. 09 

CNY

Chinese CPI (YoY) 

2.3%

2.4%

2.5%

 

CNY

Chinese PPI (YoY) 

-1.1%

-1.0%

-1.4%

 

CNY

Chinese CPI (MoM) 

-0.1%

 

0.1%

 

CAD

Housing Starts 

198.2K

189.0K

197.0K

 

USD

10-Year Note Auction 

2.597%

 

2.648%

 Jul. 10

CNY

Chinese Trade Balance 

31.60B

34.99B

35.92B

 

CNY

Chinese Exports (YoY) 

7.2%

10.6%

7.0%

 

CNY

Chinese Imports (YoY) 

5.5%

5.8%

-1.6%

 

CAD

New Housing Price Index (MoM) 

0.1%

0.3%

0.2%

 

USD

Initial Jobless Claims 

304K

315K

315K

 Jul. 11

CAD

Employment Change 

 

20.0K

25.8K

 

USD

Federal Budget Balance 

 

80.0B

-130.0B

 

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

Date

Currency

Event

Forecast

Previous

 Jul. 15

USD

Import Price Index (MoM) 

0.3%

0.1%

 

USD

Retail Sales (MoM) 

0.6%

0.3%

 

USD

NY Empire State Manufacturing Index 

18.00

19.28

 

USD

Business Inventories (MoM) 

0.5%

0.6%

Jul. 16

CNY

Chinese Fixed Asset Investment (YoY) 

17.2%

17.2%

 

CNY

Chinese GDP (YoY) 

7.4%

7.4%

 

CNY

Chinese Industrial Production (YoY) 

9.0%

8.8%

 

CNY

Chinese GDP (QoQ) 

1.8%

1.4%

 

CAD

Manufacturing Sales (MoM) 

 

-0.1%

 

USD

PPI (MoM) 

0.2%

-0.2%

 

USD

TIC Net Long-Term Transactions 

 

-24.2B

 

USD

Industrial Production (MoM) 

0.4%

0.6%

 

CAD

Interest Rate Decision 

1.00%

1.00%

 Jul. 17

USD

Building Permits 

1.038M

1.005M

 

CAD

Foreign Securities Purchases 

 

10.13B

 

USD

Housing Starts 

1.005M

1.001M

 

USD

Building Permits (MoM) 

 

-5.1%

 

USD

Housing Starts (MoM) 

 

-6.5%

 

USD

Philadelphia Fed Manufacturing Index 

16.5

17.8

Jul. 18 

CAD

CPI (MoM) 

 

0.5%

 

CAD

Wholesale Sales (MoM) 

 

1.2%

 

CAD

Core CPI (YoY) 

 

1.7%

 

USD

Michigan Consumer Sentiment 

83.2

82.5

 

USD

Michigan Consumer Expectations 

74.0

73.5

 

 

 

 

 

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