USD/CAD Fundamental Analysis March 6, 2012, Forecast

Analysis and Recommendations:

The USD/CAD is currently at 0.9941 as the USD exhibited some weakness over worries stemming from the ISM release, investor were becoming apprehensive as the March 8th deadline for the Greek PSI bond swap, which is not fully completed. There was little else of economic important effecting the markets today.



Monday March 5, 2012 Economic Data Release actual v. forecast






Company Gross Operating Profits (QoQ) 













Retail Sales (YoY) 












Services PMI 













Retail Sales (MoM) 








Also today

In the US

The Institute of Supply Management said its non-manufacturing PMI climbed to 57.3 in February from a reading of 56.8 the previous month. Economists had expected the index to decline to 56.1.

Another report showed that U.S. factory orders fell, but at a slower than forecast rate in January, declining by a seasonally adjusted 1.0%, compared to forecasts for a 1.3% slide.

In Europe

Euro zone final composite PMI falls to final 49.3 in February

Italy services PMI 44.1 in February. Down from 44.8 in January and well below Reuter’s median forecast of 45.2.

Swiss January retail sales up +4.4% y/y.

Spanish services PMI 41.9 in February. Demonstrably lower than 46.1 in January and Reuter’s median forecast of 45.9.Eighth month of contraction, lowest read since November.

In the UK

UK services sector saw growth slow in February after the surge in January, the CIPS/Markit index shows. The headline service sector CIPS/Markit index fell to 53.8 in February from an unrevised 56.0 in January, well below analysts’ median forecast for a 55.0 outturn. The detail, however, was more encouraging showing a rise in business expectations and easing inflation pressure.

Business expectations rose to their highest level for a year while output charges declined. Markit said sales were supported by discounting, with margins squeezed as input cost continued to rise.


Economic Events: (GMT)

Tuesday will be a very quiet day on the Economic Data Front.  Keep an eye on Australia, where the RBA will be announcing rates.

10:00     EUR       GDP (QoQ)                                         -0.3%                     -0.3%      

Gross Domestic Product (GDP) measures the annualized change in the inflation-adjusted value of all goods and services produced by the economy. It is the broadest measure of economic activity and the primary indicator of the economy’s health.

A higher than expected reading should be taken as positive/bullish for the EUR, while a lower than expected reading should be taken as negative/bearish for the EUR.            

15:00     CAD      Ivey PMI                                             62.1                        64.1

The Ivey Purchasing Managers’ Index (PMI) measures the activity level of purchasing managers in Canada. A reading above 50 indicates expansion; a reading below 50 indicates contraction. The index is a joint project of the Purchasing Management Association of Canada and the Richard Ivey School of Business. Traders watch these surveys closely as purchasing managers usually have early access to data about their company’s performance, which can be a leading indicator of overall economic performance.

A higher than expected reading should be taken as positive/bullish for the CAD, while a lower than expected reading should be taken as negative/bearish for the CAD.

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