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 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
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 |
0.3% |
0.1% |
|
|
USD |
0.6% |
0.3% |
|
|
USD |
18.00 |
19.28 |
|
|
USD |
0.5% |
0.6% |
|
Jul. 16 |
CNY |
17.2% |
17.2% |
|
|
CNY |
7.4% |
7.4% |
|
|
CNY |
9.0% |
8.8% |
|
|
CNY |
1.8% |
1.4% |
|
|
CAD |
-0.1% |
||
|
USD |
0.2% |
-0.2% |
|
|
USD |
-24.2B |
||
|
USD |
0.4% |
0.6% |
|
|
CAD |
1.00% |
1.00% |
|
Jul. 17 |
USD |
1.038M |
1.005M |
|
|
CAD |
10.13B |
||
|
USD |
1.005M |
1.001M |
|
|
USD |
-5.1% |
||
|
USD |
-6.5% |
||
|
USD |
16.5 |
17.8 |
|
Jul. 18 |
CAD |
0.5% |
||
|
CAD |
1.2% |
||
|
CAD |
1.7% |
||
|
USD |
83.2 |
82.5 |
|
|
USD |
74.0 |
73.5 |