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 |
Currency |
Event |
Previous |
|
|
Jun 13 |
12:30 |
CAD |
0.3% |
|
|
Jun 14 |
12:30 |
CAD |
1.9% |