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USD/CAD Weekly Fundamental Analysis May 20 – 24, 2013 Forecast
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Weekly Analysis and Recommendation: The USD/CAD continued to tumble against the US dollar ending the week at 1.0276 after almost reaching parity at the
The USD/CAD continued to tumble against the US dollar ending the week at 1.0276 after almost reaching parity at the beginning of the week. A broad based USD rally triggered by speculation over QE tapering combined with easing expectations of BoC interest rate hikes has seen the option market move aggressively to protect against USD upside and CAD weaken. In addition, yesterday’s US data was particularly disappointing for CAD, weaker than expected housing starts are not encouraging for CAD’s forestry sector. The other commodity currencies are facing similar downward pressures.
|
Date |
Last |
Open |
High |
Low |
Change % |
|
May 17, 2013 |
1.0276 |
1.0187 |
1.0312 |
1.0185 |
0.87% |
|
May 16, 2013 |
1.0187 |
1.0156 |
1.0208 |
1.0150 |
0.30% |
|
May 15, 2013 |
1.0157 |
1.0184 |
1.0219 |
1.0152 |
-0.27% |
|
May 14, 2013 |
1.0184 |
1.0103 |
1.0187 |
1.0091 |
0.80% |
|
May 13, 2013 |
1.0103 |
1.0122 |
1.0133 |
1.0083 |
-0.19% |
Highlighting the BoC’s dilemma well; with low inflationary pressures and moderate growth easier monetary policy could be justified; however high household debt and elevated housing prices leaves Canada vulnerable on the financial stability side and accordingly the BoC is likely to maintain a vaguely hawkish stance, even under Stephen Poloz’ leadership beginning June 3. In the last two days the market has eased off it’s pricing of interest rate hikes in Canada, now expecting only a 10% chance of higher rates in the next 12‐months
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 of May 13-17 actual v. forecast for the Canadian & US Dollar
|
Date |
Currency |
Event |
Actual |
Forecast |
Previous |
|
May 13 |
CNY |
Chinese Fixed Asset Investment (YoY) |
20.6% |
21.0% |
20.9% |
|
|
CNY |
Chinese Industrial Production (YoY) |
9.3% |
9.5% |
8.9% |
|
|
CNY |
Chinese Retail Sales (YoY) |
12.8% |
12.8% |
12.6% |
|
|
USD |
Core Retail Sales (MoM) |
-0.1% |
-0.1% |
-0.4% |
|
|
USD |
Retail Sales (MoM) |
0.1% |
-0.3% |
-0.5% |
|
May 14 |
USD |
Import Price Index (MoM) |
-0.5% |
-0.5% |
-0.2% |
|
May 15 |
USD |
Core PPI (MoM) |
0.1% |
0.1% |
0.2% |
|
|
CAD |
Manufacturing Sales (MoM) |
-0.30% |
1.00% |
2.80% |
|
|
USD |
PPI (MoM) |
-0.7% |
-0.6% |
-0.6% |
|
|
USD |
NY Empire State Manufacturing Index |
-1.4 |
4.0 |
3.0 |
|
|
USD |
PPI (YoY) |
0.6% |
0.8% |
1.1% |
|
|
USD |
Core PPI (YoY) |
1.7% |
1.7% |
1.7% |
|
|
USD |
TIC Net Long-Term Transactions |
-13.5B |
43.4B |
-13.3B |
|
|
USD |
Industrial Production (MoM) |
-0.5% |
-0.2% |
0.3% |
|
May 16 |
USD |
Building Permits |
1.017M |
0.945M |
0.890M |
|
|
USD |
Core CPI (MoM) |
0.1% |
0.2% |
0.1% |
|
|
USD |
CPI (MoM) |
-0.4% |
-0.2% |
-0.2% |
|
|
CAD |
Foreign Securities Purchases |
1.19B |
5.36B |
-6.28B |
|
|
USD |
Housing Starts |
0.853M |
0.973M |
1.021M |
|
|
USD |
Initial Jobless Claims |
360K |
330K |
328K |
|
|
USD |
Continuing Jobless Claims |
3009K |
3000K |
3013K |
|
|
USD |
CPI (YoY) |
1.1% |
1.3% |
1.5% |
|
|
USD |
Core CPI (YoY) |
1.7% |
1.8% |
1.9% |
|
|
USD |
Philadelphia Fed Manufacturing Index |
-5.2 |
2.4 |
1.3 |
|
May 17 |
CAD |
Core CPI (MoM) |
0.1% |
0.2% |
0.2% |
|
|
CAD |
CPI (MoM) |
-0.2% |
0.1% |
0.2% |
|
|
CAD |
Wholesale Sales (MoM) |
0.3% |
0.4% |
0.1% |
|
|
CAD |
CPI (YoY) |
0.4% |
1.0% |
1.0% |
|
|
USD |
Michigan Consumer Sentiment |
83.7 |
78.0 |
76.4 |
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
|
Date |
Time |
Currency |
Event |
Forecast |
Previous |
|
May 22 |
13:30 |
CAD |
0.7% |
||
|
|
13:30 |
CAD |
0.8% |
||
|
|
15:00 |
USD |
5.00M |
4.92M |
|
|
May 23 |
02:45 |
CNY |
50.40 |
||
|
|
15:00 |
USD |
425K |
417K |
|
|
May 24 |
13:30 |
USD |
0.5% |
-1.5% |
|
|
|
13:30 |
USD |
1.8% |
-5.8% |
Upcoming Government Bond Auctions
Date Time Country
May 20 11:00 Slovakia
May 20 11:30 France
May 20 17:30 US
May 21 03:00 Australia
May 21 05:35 Japan
May 21 05:45 Japan
May 21 10:00 Netherlands
May 21 10:30 Spain
May 21 11:30 Switzerland
May 21 16:30 Canada
May 21 17:30 US
May 22 11:03 Sweden
May 22 11:30 Germany
May 23 02:30 Australia
May 23 05:35 Japan
May 23 10:30 Spain
May 23 11:03 Sweden
May 23 18:00 Canada
May 23 19:00 US
May 24 12:10 UK
About the Author
Barry Normanauthor
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