By FXEmpire.com
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 ended the week trading at 1.002 as The USD gained momentum in the ongoing risk aversion scheme of the week. Surprising data in Canada, helped limit the drop, as data showed that Canada created 58k actual jobs when the forecast was only for 7k. Unfortunately other data from Canada was a bit disappointing.
Turmoil in Greece, Spain and Italy, continued to mount driving the USD to new recent highs, which also witnessed a huge decline in oil prices that is a negative for Canada. Weakness grew after the Canadian trade balance was out of 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, which cover the current week and are published by Sunday before the new week begins.
Major Economic Events for the past week actual v. forecast
|
May 10 |
AUD |
Employment Change |
15.5K |
-5.5K |
44.0K |
|
AUD |
Unemployment Rate |
4.9% |
5.3% |
5.2% |
|
|
GBP |
Interest Rate Decision |
0.50% |
0.50% |
0.50% |
|
|
CAD |
Trade Balance |
0.4B |
1.0B |
0.3B |
|
|
USD |
Trade Balance |
-51.8B |
-50.0B |
-45.4B |
|
|
USD |
Initial Jobless Claims |
367K |
369K |
368K |
|
|
USD |
Fed Chairman Bernanke Speaks |
||||
|
May 11 |
CNY |
Chinese CPI (YoY) |
3.4% |
3.3% |
3.6% |
|
CNY |
Chinese CPI (MoM) |
-0.1% |
-0.2% |
0.2% |
Historical:
Highest: 1.0842 CAD on 01 Nov 2009.
Average: 1.0147 CAD over this period.
Lowest: 0.9435 CAD on 26 Jul 2011.
Upcoming Economic Events that affect the CHF, EUR, GBP and USD
|
May 14 |
07:00 |
EUR |
Finnish CPI (YoY) |
2.90% |
|
08:15 |
CHF |
PPI (MoM) |
0.3% |
|
|
08:30 |
EUR |
Dutch Retail Sales (YoY) |
0.90% |
|
|
10:00 |
EUR |
Industrial Production (MoM) |
-0.2% |
0.5% |
|
May 15 |
06:30 |
EUR |
French CPI (MoM) |
0.8% |
|
07:45 |
EUR |
French Non-Farm Payrolls (QoQ) |
-0.1% |
|
|
09:30 |
GBP |
Trade Balance |
-8.8B |
|
|
May 16 |
09:30 |
GBP |
Average Earnings Index +Bonus |
1.1% |
|
09:30 |
GBP |
Claimant Count Change |
3.6K |
|
|
10:00 |
EUR |
CPI (YoY) |
2.6% |
2.6% |
|
10:00 |
EUR |
Core CPI (YoY) |
1.6% |
|
|
11:00 |
EUR |
Portuguese Unemployment Rate |
14.00% |
Upcoming Government Bond Auctions
Date Time Country
May 14 08:30 Spain
May 14 09:10 Italy
May 14 09:10 Slovakia
May 14 09:10 Norway
May 14 09:30 Germany
May 14 10:00 Norway
May 15 09:30 Belgium
May 15 09:30 UK
May 16 08:50 France
May 16 09:10 Sweden
Originally posted here
