USD/CAD Fundamental Analysis June 1, 2012, Forecast

Analysis and Recommendations:

The USD/CAD is trading at 1.0319 as the USD continues to gather momentum. Markets shrugged off disappointing eco data, and decided to wait for the all important Nonfarm payroll report to verify the ADP and unemployment figures released today. The US revised down their GDP estimates but the Current Account surprised markets coming in substantially lower with is positive for the USD.

No major negative news headlines, an increased focused and support for the ERF initiative, a weaker than expected European CPI (2.4%), expectation that Ireland will vote in favor of the fiscal compact, worries that markets are oversold and the upcoming release of China’s PMI, Eurozone PMIs and nonfarm employment have markets vaguely more positive today. In this environment equities are stronger, commodities are off their lows, bond yields are mixed and the USD has lost some of yesterday’s strength, that was until late morning in US trading when investors sentiment turned negative, commodities fell, equities turned bearish and the USD picked up momentum as the euro fell below the 1.24 price again.

Risk reversals remain elevated, suggesting there is still the desire to protect against USD strength.

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 May 31, 2012 actual v. forecast

 

Currency

 

 

 

Event

Actual

 

Forecast

 

Previous

 

 

 

JPY

 

 

 

Industrial Production (MoM) 

0.2%

 

0.5% 

 

1.3% 

 

 

 

AUD

 

 

 

Building Approvals (MoM) 

-8.7%

 

0.7% 

 

6.0% 

   

 

AUD

 

 

 

Private New Capital Expenditure (QoQ) 

6.1%

 

4.0% 

 

-0.7% 

   

 

CHF

 

 

 

GDP (QoQ) 

0.7%

 

0.1% 

 

0.5% 

   

 

GBP

 

 

 

Nationwide HPI (MoM) 

0.3%

 

0.2% 

 

-0.3% 

   

 

EUR

 

 

 

French Consumer Spending (MoM) 

0.6%

 

0.3% 

 

-2.6% 

   

 

EUR

 

 

 

German Unemployment Rate 

6.7%

 

6.8% 

 

6.8% 

 

 

 

EUR

 

 

 

German Unemployment Change 

0K

 

-5K 

 

18K 

   

 

EUR

 

 

 

CPI (YoY) 

2.4%

 

2.5% 

 

2.6% 

 

 

 

USD

 

 

 

ADP Nonfarm Employment Change 

133K

 

148K 

 

113K 

   

 

CAD

 

 

 

Current Account 

-10.3B

 

-11.0B 

 

-9.7B 

   

 

USD

 

 

 

Initial Jobless Claims 

383K

 

370K 

 

373K 

   

 

USD

 

 

 

GDP (QoQ) 

1.9%

 

1.9% 

 

2.2% 

 

 

 

USD

 

 

 

Continuing Jobless Claims 

3242K

 

3250K 

 

3278K 

   

 

USD

 

 

 

Chicago PMI 

52.7

 

56.5 

 

56.2 

   

 

Upcoming Economic Events that affect the CHF, EUR, GBP and USD

Date

Time

Currency

 

Previous

Jun 1

TBD

GBP

Halifax HPI m/m

 

7:15

CHF

Retail Sales y/y

4.2%

7:30

CHF

SVME PMI

46.9

7:45

EUR

Italian Manufacturing PMI

43.8

8:30

GBP

Manufacturing PMI

50.5

9:00

EUR

Unemployment Rate

10.9%

12:30

USD

Non-Farm Employment Change

115K

12:30

USD

Unemployment Rate

8.1%

12:30

USD

Core PCE Price Index m/m

0.0%

12:30

USD

Personal Spending m/m

0.2%

12:30

USD

ISM Manufacturing PMI

0.3%

14:00

USD

S&P/CS Composite-20 HPI y/y

54.8

 

 

 

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