USD/CAD Weekly Fundamental Analysis, October 6-10 2014, Forecast

Weekly Analysis and Recommendation: 

The USD/CAD broke above 1.12 hitting a new high at 1.1249 after the release of the jobs report in the US.  The Canadian economy is posting moderate growth averaging around 2½% y/y. Consumer spending remains reasonably buoyant. Supported by heavy discounting, motor vehicle sales in August set a new record for the month. Housing activity is also quite robust, with low mortgage rates maintaining affordability in the face of high home prices. However, consumer confidence and buying intentions have softened in recent months amid growing pessimism over labour market conditions. Monthly employment growth through August has averaged just 10,400, less than half the growth in the labour force population. Combined with limited pent-up demand (car sales and homeownership rates are at record levels), consumers are expected to be relatively cautious spenders in the year ahead.

The Canadian dollar fell to its lowest point in six months against the U.S. dollar after the nation posted an unexpected trade deficit in August, supporting the Bank of Canada’s cautious outlook on the economy.

The Bank of Canada has held its benchmark interest rate at 1 percent for four years and maintained last month it is as likely to lower borrowing costs as raise them while it waits for signs of a sustained export recovery that can power economic growth.  

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: 1.1270 CAD on Oct 04, 2014

Average: 1.0042 CAD over this period

Lowest: 0.9407 CAD on Jul 26, 2011

Events You Should Be Monitoring This Week:

CAD                      Ivey PMI

NZD                      NZIER Business Confidence

JPY                        Monetary Policy Statement

AUD                      Cash Rate

AUD                      RBA Rate Statement

JPY                        BOJ Press Conference

GBP                       Manufacturing Production m/m

CAD                      Building Permits m/m

USD                      FOMC Meeting Minutes

AUD                      Employment Change

AUD                      Unemployment Rate

GBP                       Asset Purchase Facility

GBP                       Official Bank Rate

GBP                       MPC Rate Statement

USD                      Unemployment Claims

EUR                      ECB President Draghi Speaks

CAD                      Employment Change

CAD                      Unemployment Rate

Upcoming Government Bond Auctions

Date Time Country 

Oct 07 06:00 Swiss Announces details of optional bond auction on Oct 08

Oct 07 09:00 Norway Bond auction

Oct 07 09:15 Austria RAGB auction

Oct 07 9:30 UK Auctions 3.5% 2045 Gilt

Oct 07 15:30 Italy Announces details of BOT auction on Oct 10

Oct 07 17:00 US 3Y Note auction

Oct 08 09:30 Germany Eur 4.0bn Oct 2019 Bobl auction

Oct 08 09:30 Swiss Bond auction (for decision)

Oct 08 15:30 Italy Announces details of BTP

Oct 08 17:00 US 10Y Note auction

Oct 09 09:03 Sweden I/L bond auction

Oct 09 17:00 US 30Y bond auction

Oct 10 09:10 Italy BOT auction