USD/CAD Fundamental Analysis July 10, 2012, Forecast

Analysis and Recommendations:

The USD/CAD is trading at 1.0196 in early trading on Monday. The CAD is weak in early trading having lost 0.1% since Friday; however the currency remains surprisingly resilient in the face of the shift lower in EUR. Strong domestic data combined with the collapse in EURCAD and the shift lower in risk aversion has worked in CAD’s favor. The drop lower in volatility measures is somewhat surprising considering markets feel riskier as global growth forecasts have shifted lower. Still the VIX (S&P 500 volatility) and advanced economies FX vol have all come lower, likely on the renewed commitments from global central bank to provide stimulus. Today, the BoC will release its business outlook future sales survey and senior loan officers survey; important but unlikely to change the course of CAD materially.

Any action here will be at the whim of the USD and the news flow from the Eurogroup meetings.

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 up to the data analysis and information in our weekly reports.

Economic Data for July 9, 2012 actual v. forecast

Date

Time

 

Currency

 

 

 

Event

Actual

 

Forecast

 

Previous

 

 

Jul. 09

00:50

 

JPY

 

 

 

Adjusted Current Account 

0.28T

 

0.42T 

 

0.29T 

 

 

 

02:30

 

CNY

 

 

 

Chinese CPI (YoY) 

2.2%

 

2.3% 

 

3.0% 

 

 

 

02:30

 

CNY

 

 

 

Chinese PPI (YoY) 

-2.1%

 

-1.9% 

 

-1.4% 

 

 

 

02:30

 

CNY

 

 

 

Chinese CPI (MoM) 

-0.6%

 

-0.3% 

 

-0.3% 

 

 

 

06:45

 

CHF

 

 

 

Unemployment Rate 

2.9%

 

3.2% 

 

2.9% 

   

 

13:30

 

EUR

 

 

 

ECB President Draghi Speaks 

 

 

 

 

 

   

 

Upcoming Economic Events that affect the CAD and USD

Date

Time

Currency

 Event

Previous

Jul 10

12:15

CAD

Housing Starts

211K

Jul 11

12:30

CAD

Trade Balance

-0.4B

12:30

USD

Trade Balance

-50.1B

14:30

USD

Crude Oil Inventories

-4.3M

Jul 12

12:30

CAD

NHPI m/m

0.2%

12:30

USD

Unemployment Claims

 

12:30

USD

Import Prices m/m

-1.0%

18:00

USD

Federal Budget Balance

-124.6B

Jul 13

12:30

USD

PPI m/m

-1.0%

13:55

USD

Prelim UoM Consumer Sentiment

73.2

 

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