USD/CAD Forecast Dec. 30, 2011, Fundamental Analysis

The USD/CAD pair depreciated on Thursday, after jobless claims rose last week above expectations, while Chicago PMI index came better than forecasted in December, in addition, sales of pending homes in the U.S climbed 7.3 percent above expectations of 1.5 percent.

While The euro fell to a 15-month low against the US dollar as Italian bond yields rose after the nation sold less than its maximum target at an auction, highlighting funding problems amid the region’s sovereign-debt crisis.

Still, the light is spotted on this period of time, as this year is coming in to an end as this day is the last trading day before the New Year infamous for low volume and tight ranged trading. The sentiment will start to shape as investors stay aside ahead of the start of the coming year and closely eye developments from the euro area.

The USD/CAD pair could still rise if pessimism continues to dominate markets, but we still expect volatility to hold the steer for now, as uncertainty remains the main theme in markets, and that could also lead to deep fluctuations for the USD/CAD pair.

Friday December 30:

No economic data will be released from Canada so eyes will be focused on Europe and the crisis that could impact trading during the last trading day of the year.

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