The USD/CAD pair declined on Tuesday as concerns over the European debt crisis eased amid speculations Greece will avoid restructuring its debt, while rising commodity prices boosted the Canadian dollar and pushed the USD/CAD pair to the downside.
Import prices in the United States rose above expectations in March, as food and energy prices rose strongly amid the political tensions in the Middle East and North Africa regions, while wholesale inventories also rose above expectations.
The USD/CAD pair our medium term outlook for the pair remains unchanged, since we expect the pair to extend its drop to the downside, nevertheless, the pair could still fluctuate over the short term, and the movement of the USD/CAD pair will depend on oil prices, since rising oil prices will push the pair further to the downside.
Wednesday 12:30, Canada will release the international merchandise trade balance for the month of March, where Canada’s trade balance is expected to come in flat in line with the prior estimates, where despite rising commodity prices, which support Canadian exports, but the rising value of the Canadian dollar seem to have weighed down on exports.
Wednesday 12:30, the U.S. will release the trade balance for the month of March, where the trade deficit is expected to widen to $47.0 billion, compared with the prior deficit of $45.8 billion in March, where the depreciation of the U.S. dollar seem to have weighed negatively on the trade deficit, in addition to rising energy prices, which must have weighed down on the deficit as well.
Wednesday, 14:30, The Department of Energy will release the weekly petroleum status for the week ending May 6, where the prior report showed that crude oil inventories increased by 3.4 million barrels, and Wednesday’s report is expected to show that crude oil inventories increased by 1.5 million barrels.
Originally posted here
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