By FXEmpire.com

Analysis and Recommendations:

The USD/CAD is trading at 1.0151 as the USD maintains strength here although it fell after retail sales missed their mark. Traders were worried that the drop in consumer confidence would flow over to retail sales. US retails reported well below forecast (see chart below).

CAD is slightly weaker against the USD in early North America trading, but outperforming on its crosses. EURCAD has reached a new record low today.

The focus this week for CAD will be the BoC meeting on Tuesday, where it is expected to leave interest rates on hold at 1.0%; however the tone of the statement will prove particularly important. The potential offset might come from Chair Bernanke’s report to the Senate. For the BoC, developments since June 5th (the last meeting) include: tighter mortgage and housing rules in Canada, a 2% rally in CAD, an escalation in the European crisis and a dovish tone from most central banks. In this environment, we would expect the hawkish BoC tone to soften, which risks weighing temporarily on CAD.

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 Releases for Monday, July 16, 2012 actual v. forecast

Date

Currency

Event

Actual

Forecast

Previous

Jul. 16

GBP

Rightmove House Price Index (MoM)

-1.7%

1.0%

EUR

CPI (YoY)

2.4%

2.4%

2.4%

EUR

Core CPI (YoY)

1.6%

1.6%

1.6%

USD

Core Retail Sales (MoM)

-0.4%

0.1%

-0.4%

CAD

Foreign Securities Purchases

26.11B

13.50B

10.16B

USD

Retail Sales (MoM)

-0.5%

0.2%

-0.2%

USD

NY Empire State Manufacturing Index

7.4

4.0

2.3

Upcoming Economic Events that affect the CAD and USD

Date

Time

Currency

Event

Previous

Jul 17

9:15

ALL

G7 Meetings

12:30

CAD

Manufacturing Sales m/m

-0.8%

12:30

USD

CPI m/m

-0.3%

13:00

CAD

BOC Rate Statement

13:00

CAD

Overnight Rate

1.00%

13:00

USD

TIC Long-Term Purchases

25.6B

13:15

USD

Industrial Production m/m

-0.1%

Jul 18

12:30

USD

Building Permits

0.78M

12:30

USD

Housing Starts

0.71M

14:30

CAD

BOC Monetary Policy Report

14:30

USD

Crude Oil Inventories

-4.7M

15:15

CAD

BOC Press Conference

Jul 19

12:30

CAD

Wholesale Sales m/m

1.5%

12:30

USD

Unemployment Claims

14:00

USD

Existing Home Sales

4.55M

14:00

USD

Philly Fed Manufacturing Index

-16.6

Jul 20

12:30

CAD

CPI m/m

-0.1%

Upcoming Government Bond Auctions

Date Time Country Auction

Jul 17 08:30 Spain Eur 2.5-3.5bn Jul 2013 (12M) & Dec 2013 (18M) T-bills

Jul 17 09:10 Greece Eur 1.25bn Oct 2012 (3M) T-bills

Jul 17 09:30 Belg Up to Eur 3.0bn Oct 2012 (3M) & Jul 2013 (12M) T-bills

Jul 17 10:00 EFSF Up to Eur 1.5bn Jan 2013 (6M) T-bills

Jul 18 09:30 Ger Eur 5.0bn 0.00% Jun 2014 Schatz

Jul 18 09:30 Port Eur 1.75-2.0bn new Jan 2013 (6M) & new Jul 2013 (12M)

Jul 19 00:30 Japan Auctions 5Y JGBs

Jul 19 08:30 Spain Eur 2.0-3.0bn 3.3% Oct 2014 Bono, 5.5% Jul 2017 &

Jul 19 08:50 France Eur 8.0-9.0bn 2.5% Jan 2015, 2.5% Jul 2016 & new 1.0%

Jul 19 09:30 UK GBP 1.75bn 3.75% Jul 2052 Gilt

Jul 19 09:50 France Eur 1.0-1.5bn 1.3% Jul 2019 OATi,

Jul 19 17:00 US USD 15.0bn 10Y Tips

Click here for updated USD/CAD News.

Originally posted here