USD/CAD Weekly Fundamental Analysis June 11-15, 2012, Forecast

Introduction: The Canadian Dollar moves in reaction to the US Dollar. Movements are small and easy to track and trade. The Canadian Dollar also responds to economic reports within Canada. It has little action against foreign currencies except during major moves or crisis.

The USD/CAD is the single biggest beneficiary of rising oil prices. Canada which is already the biggest exporter of oil to the US will experience a boost to its economy when oil price continue to increase. Therefore, if oil rises the Canadian dollar is likely to follow. Over the past years, the correlation between the Canadian dollar and oil prices has been approximately 81%. 

Weekly Analysis and Recommendation:

The USD/CAD spent the week in the red, as the Looney just had no luck or strength. All week long, eco data from Canada disappointed markets and the currency continued to tumble. The pair ended the week at 1.0260.

Date

Last

Open

High

Low

Change %

Jun 08, 2012

1.0260

1.0273

1.0355

1.0260

-0.13%

Jun 07, 2012

1.0273

1.0285

1.0296

1.0211

-0.12%

Jun 06, 2012

1.0285

1.0369

1.0373

1.0272

-0.82%

Jun 05, 2012

1.0370

1.0379

1.0426

1.0362

-0.09%

Jun 04, 2012

1.0379

1.0443

1.0447

1.0370

-0.61%

As shown in the chart below Ivey PMI came in above forecast, but employment fell, the trade balance fell and building permits declined. There just wasn’t anything positive out of Canada which remains under pressure as crude oil continues to decline.

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 recent analysis and information in our weekly reports and we provide daily updates and outlooks.

Major Economic Events for the week of June 4 – 8 actual v. forecast for the Canadian & US Dollar

Date

Currency

 Event

Actual

Forecast

Previous

Jun 5

CAD

Building Permits m/m

-5.2%

-0.3%

4.9%

CAD

Overnight Rate

1.00%

1.00%

1.00%

USD

ISM Non-Manufacturing PMI

53.7

53.6

53.5

USD

Unemployment Claims

377K

381K

389K

Jun 7

CAD

Ivey PMI

60.5

53.5

52.7

CAD

Employment Change

7.7K

10.0K

58.2K

Jun 8

CAD

Trade Balance

-0.4B

0.2B

0.2B

CAD

Unemployment Rate

7.3%

7.3%

7.3%

USD

Trade Balance

-50.1B

-49.4B

-52.6B

Historical:

Highest: 1.0842 CAD on Nov 01, 2009.

Average: 1.0147 CAD over this period.

Lowest: 0.9407  CAD on Jan 26, 2011.

Economic Highlights of the coming week that affect the Canadian Markets.

Date

Time

Currency

 Event

Previous

  Jun 13

12:30

CAD

NHPI m/m

0.3%

Jun 14

12:30

CAD

Manufacturing Sales m/m

1.9%

 

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