USD/CAD Fundamental Analysis June 4, 2012, Forecast

Analysis and Recommendations:

The USD/CAD climbed today, as crude prices continued to fall, creating more weakness for the CAD, which closed at 1.0391

CAD has weakened further, losing another 0.5% since yesterday’s close or a total of 6% since its high on April 27th. Previous periods of risk aversion have typically been relatively short and violent and it is increasingly evident that we are in the midst of just such a period. Unless there is an attempt to relieve some of the European uncertainty, CAD losses are likely to continue.

Eco data in the US was and has been very negative, but has not put a dent in the strength of the USD.

To sum up the US for the past few days, there is just one thing to say, “spring stall” most of the indicators from the US have been negative or lackluster.

Employment data is terrible, Unemployment data is just as bad, Housing data is negative overall. Durable goods and retail sales, consumer confidence and manufacturing have all turned negative.

If it wasn’t for the mess in Europe, investors would be fleeing the US. Today, the Nonfarm data showed that the US only added 69,000 jobs, when it needs to average 200,000 additions per month. Unemployment has climbed back to 8.2%. GBP was revised downward this week and ISM manufacturing reported below forecast.

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 June 1, 2012 actual v. forecast

Date

 

Currency

 

 

Event

Actual

 

Forecast

 

Previous

 

 

Jun. 01

 

KRW

 

 

South Korean CPI (YoY) 

2.5%

 

2.5% 

 

2.5% 

 

 

 

 

JPY

 

 

Capital Spending 

3.30%

 

1.30% 

 

7.60% 

 

 

 

 

CNY

 

 

Chinese Manufacturing PMI 

50.40

 

52.20 

 

53.30 

 

 

 

 

CNY

 

 

Chinese HSBC Man PMI 

48.40

 

 

 

48.70 

 

 

 

 

CHF

 

 

Retail Sales (YoY) 

0.1%

 

2.0% 

 

4.7% 

   

 

 

CHF

 

 

SVME PMI 

45.4

 

46.4 

 

46.9 

 

 

 

 

EUR

 

 

French Manufacturing PMI 

44.7

 

44.4 

 

44.4 

 

 

 

 

EUR

 

 

German Manufacturing PMI 

45.2

 

45.0 

 

45.0 

 

 

 

 

EUR

 

 

Manufacturing PMI 

45.1

 

45.0 

 

45.0 

 

 

 

 

GBP

 

 

Manufacturing PMI 

45.9

 

49.7 

 

50.2 

   

 

 

EUR

 

 

Unemployment Rate 

11.0%

 

11.0% 

 

11.0% 

   

 

 

USD

 

 

Average Hourly Earnings

0.1%

 

0.2% 

 

0.1% 

   

 

 

USD

 

 

Core PCE Price Index (MoM) 

0.1%

 

0.2% 

 

0.2% 

 

 

 

 

CAD

 

 

GDP (MoM) 

0.1%

 

0.3% 

 

-0.2% 

 

 

 

 

USD

 

 

Nonfarm Payrolls 

69K

 

150K 

 

77K 

   

 

 

USD

 

 

Personal Spending (MoM) 

0.3%

 

0.3% 

 

0.2% 

   

 

 

USD

 

 

Unemployment Rate 

8.2%

 

8.1% 

 

8.1% 

 

 

 

 

USD

 

 

Average Weekly Hours 

34.4

 

34.5 

 

34.5 

 

 

 

 

USD

 

 

Private Nonfarm Payrolls 

82K

 

160K 

 

87K 

   

 

 

USD

 

 

ISM Manufacturing Index 

53.5

 

53.9 

 

54.8 

 

 

 

Upcoming Economic Events that affect the CAD and USD

Date

Time

Currency

 

Forecast

Previous

 

Jun 4

14:00

USD

Factory Orders m/m

 

-1.5%

 

Jun 5

12:30

CAD

Building Permits m/m

 

4.7%

13:00

CAD

BOC Rate Statement

   

13:00

CAD

Overnight Rate

1.00%

1.00%

14:00

USD

ISM Non-Manufacturing PMI

 

53.5

 

Jun 6

12:30

USD

Revised Nonfarm Productivity q/q

 

-0.5%

14:30

USD

Crude Oil Inventories

   

18:00

USD

Beige Book

   

 

Jun 7

12:30

USD

Unemployment Claims

 

383K

14:00

CAD

Ivey PMI

 

52.7

14:00

USD

Fed Chairman Bernanke Testifies

   

 

Jun 8

12:15

CAD

Housing Starts

 

245K

12:30

CAD

Employment Change

 

58.2K

12:30

CAD

Trade Balance

 

0.4B

12:30

CAD

Unemployment Rate

 

7.3%

12:30

CAD

Labor Productivity q/q

 

0.7%

12:30

USD

Trade Balance

 

-51.8B

14:00

USD

Fed Chairman Bernanke Testifies

   

 

Government Bond Auctions

Date  Time  Country 

May 31  14:30  Sweden 

Jun 04  10:00  Norway 

Jun 05  00:30  Japan 

Jun 05  09:30  Belgium

Jun 05 14:30  Sweden 

Jun 06  09:30  Germany 

Jun 06  09:30  Portugal 

Jun 06 14:30  UK 

Jun 07  00:30  Japan 

Jun 07  08:30  Spain 

Jun 07  08:50  France 

Jun 07  09:10  Sweden 

Jun 07  15:00  US 

Jun 08  10:00  Belgium 

Jun 08  15:30  Italy 

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