Weekly Analysis and Recommendations: The USD/CAD rose last week, driven higher by the probability of a December interest rate hike by the Fed and falling
Crude oil prices fell over 7% to a 2-month low on oversupply concerns. This led to lower demand for the Canadian Dollar. Oil prices weakened after the U.S. Energy Information Administration reported a 4.22 million barrel build versus a 1.0 million barrel build estimate.
In other news, the Royal Bank of Canada, the nation’s largest lender advised its clients to fund their carry trades with the Canadian Dollar, not the Euro until the Bank of Canada takes action. Canadian housing data came out in line with expectations.
The key focus this week will be on consumer inflation with the U.S. reporting on November 17 and Canada reporting on November 20.
U.S. consumer inflation is expected to show an increase of 0.2%. A steady-to-better reading will likely increase the odds of a Fed rate hike in December. This would be bullish for the USD/CAD.
Canadian consumer inflation is expected to come out at 1.0%. The Bank of Canada Price Core Year-over-Year is expected to bring 2.1%.
Forecast: Unless traders are surprised by substantially stronger Canadian CPI data or a weaker-than-expected U.S. CPI number, the USD/CAD’s direction will be primarily driven by the direction of crude oil prices.
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.
Reports to Watch This Week:
Date Time Curr Events Forecast Previous
Sun Nov 15 |
All Day |
ALL |
G20 Meetings |
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Mon Nov 16 |
8:30am ET |
CAD |
Manufacturing Sales m/m |
0.3% |
-0.2% |
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CAD |
Foreign Securities Purchases |
4.12B |
3.11B |
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USD |
Empire State Manufacturing Index |
-5.3 |
-11.4 |
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Tue Nov 17 |
8:30am ET |
USD |
CPI m/m |
0.2% |
-0.2% |
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USD |
Core CPI m/m |
0.2% |
0.2% |
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9:15am ET |
USD |
Capacity Utilization Rate |
77.5% |
77.5% |
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USD |
Industrial Production m/m |
0.1% |
-0.2% |
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17th-19th |
USD |
Mortgage Delinquencies |
5.30% |
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10:00am ET |
USD |
NAHB Housing Market Index |
64 |
64 |
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4:00pm ET |
USD |
TIC Long-Term Purchases |
20.4B |
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Wed Nov 18 |
8:00am ET |
USD |
FOMC Member Lockhart Speaks |
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8:30am ET |
USD |
Building Permits |
1.15M |
1.11M |
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USD |
Housing Starts |
1.16M |
1.21M |
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10:30am ET |
USD |
Crude Oil Inventories |
4.2M |
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2:00pm ET |
USD |
FOMC Meeting Minutes |
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Thu Nov 19 |
8:30am ET |
CAD |
Wholesale Sales m/m |
-0.1% |
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USD |
Unemployment Claims |
272K |
276K |
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10:00am ET |
USD |
Philly Fed Manufacturing Index |
0.1 |
-4.5 |
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USD |
CB Leading Index m/m |
0.5% |
-0.2% |
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10:30am ET |
USD |
Natural Gas Storage |
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12:30pm ET |
USD |
FOMC Member Lockhart Speaks |
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Fri Nov 20 |
8:30am ET |
CAD |
Core CPI m/m |
0.2% |
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CAD |
Core Retail Sales m/m |
0.0% |
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CAD |
CPI m/m |
-0.2% |
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CAD |
Retail Sales m/m |
0.5% |
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Sat Nov 21 |
12:00pm ET |
USD |
FOMC Member Williams Speaks |
James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.