USD/CAD Weekly Fundamental Analysis November 25-29, 2013 Forecast

Weekly Analysis and Recommendation:

The USD/CAD  climbed well above its trading range to close the week at 1.0538. The CAD is weak, having traded to a fresh 4.5‐month low and broken through support. In USDCAD terms, spot is now flirting with a break above the July high of 1.0609. There are many reasons we could point to for CAD weakness—looming inflation data, a dovish BoC, broad weakness in the commodity currencies, weaker data from China, however interest rate spreads haven’t followed suit, option market  are not pricing  a sudden  desire to  protect  against USD strength, the spread between Western Canadian Select oil and Brent and WTI has narrowed and  EUR has rallied.  The most likely culprit is twofold. The negative FDI connotation around the decision by Cliffs Natural Resources to cancel plans in Thunder Bays’ chromite deposit.  Secondly USDCAD bulls but do think that there is no clear driver that accounts for the sudden surge in USDCAD and accordingly is likely somewhat flow driven.

Federal Reserve officials said they plan to begin trimming the central bank’s stimulus efforts in “the coming months”. They believe that the US recovery is strengthening, according to minutes from their October meeting. The US central bank is currently engaged in an $85bn (£53bn) a month bond buying programme to lower interest rates and boost the US economy. US markets fell on the news of a potential slowing of easy money.

In the meeting minutes, released on Wednesday, policy makers said they “generally expected that the data would prove consistent with the Committee’s outlook for ongoing improvement in labor market conditions and would thus warrant trimming the pace of purchases in coming 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.

Historical: From 2011 to present

Highest: 1.0657 CAD on Oct 04, 2011

Average: 1.0042 CAD over this period

Lowest: 0.9407  CAD on Jul 26, 2011

Major Economic Events for the week of November 18-22 actual v. forecast for the Canadian & US Dollar

 

 

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

Government Bond Auction

Date Time Country 

Nov 25 10:30 Germany

Nov 25 11:00 Belgium

Nov 25 16:30 Italy

Nov 25 18:00 US

Nov 26 09:10 Holland

Nov 26 09:30 Spain

Nov 26 10:10 Italy

Nov 26 12:00 Norway

Nov 26 18:00 US

Nov 27 10:10 Italy

Nov 27 10:10 Sweden

Nov 27 10:30 Germany

Nov 27 18:00 US

Nov 28 10:10 Italy

Nov 28 10:30 UK