By FXEmpire.com
Analysis and Recommendations:
The USD/CAD is trading at 1.0392. Friday’s weak GDP (0.1%m/m and 1.9% for Q1 annualized) combined with the escalation in Europe, has cemented a more dovish expectation from the BoC this week. In the last statement, it was noted that: “The external headwinds” facing Canada have abated somewhat, with the U.S. recovery more resilient and financial conditions more supportive than previously anticipated”, this is likely no longer true, which has helped push the expectation for interest rates in Canada from pricing in a rate hike to a 56% chance of a rate cut in the next 9-months. Friday’s CFTC FX sentiment report highlights that traders are net long CAD , a position that is likely to be unwound and aggravate CAD weakness. This week’s focus is global central banks, the potential for a shift in tone could help contain CAD losses, even with a more dovish BoC.
The flagging economic indicators from the U.S and China are proving to be a headwind for investors, who are already unnerved by the escalating debt concerns in the Euro region. Looking into this week, key central bank actions are scheduled, which could entice market forces. After a disappointing payroll numbers from the U.S on Friday, market onlookers would be keenly looking forward to the Federal Reserve Chairman Bernanke’s testimony before the Congress on Thursday, where a possible hint of QE3 could be on cards. With European economies battered by rising debts, all eyes would be on the European Central Bank (ECB) meeting on Thursday, where President Draghi is expected to retain the rates at 1 percent but could initiate bond buying action amid spreading contagion. German Chancellor Angela Merkel is expected to meet EU commissioner Jose Barroso in Berlin today evening to discuss on current situation in Europe, including the preparation for the next European Council meeting June 28-29 in Brussels. Overall, the week could be held hostage to events unfolding in Europe, although hopes of a QE3 could rejuvenate market entities.
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 June 4, 2012 actual v. forecast (virtually no eco data in Europe or the US today)
|
Date |
Currency |
Event |
Actual |
Forecast |
Previous |
|
Jun. 04 |
JPY |
Monetary Base (YoY) |
2.4% |
0.2% |
-0.3% |
|
AUD |
MI Inflation Gauge (MoM) |
0.0% |
0.3% |
||
|
AUD |
Company Gross Profits (QoQ) |
-4.0% |
-2.0% |
-6.5% |
|
|
AUD |
ANZ Job Advertisements (MoM) |
-2.40% |
-0.80% |
Upcoming Economic Events that affect the CAD and USD
|
Date |
Time |
Currency |
Forecast |
Previous |
|
Jun 5 |
12:30 |
CAD |
4.7% |
|
|
13:00 |
CAD |
|||
|
13:00 |
CAD |
1.00% |
1.00% |
|
|
14:00 |
USD |
53.5 |
||
|
Jun 6 |
12:30 |
USD |
-0.5% |
|
|
14:30 |
USD |
|||
|
18:00 |
USD |
|||
|
Jun 7 |
12:30 |
USD |
383K |
|
|
14:00 |
CAD |
52.7 |
||
|
14:00 |
USD |
|||
|
Jun 8 |
12:15 |
CAD |
245K |
|
|
12:30 |
CAD |
58.2K |
||
|
12:30 |
CAD |
0.4B |
||
|
12:30 |
CAD |
7.3% |
||
|
12:30 |
CAD |
0.7% |
||
|
12:30 |
USD |
-51.8B |
||
|
14:00 |
USD |
Government Bond Auctions
Date Time Country
Jun 05 00:30 Japan
Jun 05 09:30 Belgium
Jun 05 14:30 Sweden
Jun 06 09:30 Germany
Jun 06 09:30 Portugal
Jun 06 14:30 UK
Jun 07 00:30 Japan
Jun 07 08:30 Spain
Jun 07 08:50 France
Jun 07 09:10 Sweden
Jun 07 15:00 US
Jun 08 10:00 Belgium
Jun 08 15:30 Italy
Click here for further USD/CAD Forecast.
Originally posted here
