USD/CAD Daily Fundamental Analysis for August 11, 2011

By FXEmpire.com

The USD/CAD pair rose back on Wednesday, as despite the Fed’s pledge to keep rates unchanged through mid 2013, yet mounting concerns over the outlook for growth in the United States, and the ongoing fears that the European debt crisis will continue to spread into other major economies within the Euro Zone, maintained the pressure on higher yielding assets, as traders opted for safe havens and low yielding assets, which provided the USD/CAD pair with bullish momentum.

The huge pessimism that continues to dominate global financial markets should continue to boost demand for lower yielding and more safe assets, and accordingly, we preserve our bullish outlook for the USD/CAD pair, and any downside movements are not expected to prevail, since risk aversion will provide the USD/CAD pair with the needed bullish momentum.

Thursday August 11:

The ECB will release the monthly report at 08:00 GMT and will include the details of the special liquidity operations and the extension of the money operations that Trichet announced last week when the bank left rates steady at 1.50%.

Canada will release the new housing price index for the month of June at 12:30 GMT, where the new housing prices rose by 0.4% in May, while compared with a year earlier, the new housing price index rose by 1.9% back in May.

Canada will also release the international merchandise trade balance for the month of June, where the trade deficit is expected to widen to 1.0 billion CAD, compared with the prior deficit of 0.8 billion CAD.

The data from the United States will start as usual with the weekly jobless claims at 12:30 after they rose last week by 400 thousand.

Also at 12:30 GMT the trade balance for June is due and the deficit is expected to narrow to $47.5 billion from $50.2 billion.