By FXEmpire.com

Analysis and Recommendations:

The USD/CAD are trading at 0.993.5 having moved once again towards parity, mainly on the back of weaker than expected US employment as bad news for the US economic backdrop is bad news for Canada, and leaves USDCAD vulnerable as the Canadian employment release which is scheduled for this coming Friday. The rolling 30-day correlation between CAD and WTI oil is only at 0.4, well below historical levels; however oil prices back below $100 are also weighing on CAD. Finally, after pricing in aggressive interest hikes in Canada after Governor Carney shifted the BoC’s stance to hawkish, the market is increasingly pairing back its expectations. There is little in the way of eco data, but the big news here is the drop in oil prices which will benefit the US economy and is negative for the CAD.

This is a quiet eco data week, and the US will be enjoying the drop in crude prices, otherwise we will not see or hear much on this side of the Atlantic except for election year rhetoric. Most attention will be trained once again on the eurozone and their debt crisis.

Economic Releases May 7, 2012 actual v. forecast

AUD

Building Approvals (MoM)

7.4%

3.1%

-8.8%

AUD

NAB Business Confidence

4

3

AUD

Retail Sales (MoM)

0.9%

0.2%

0.3%

CHF

Unemployment Rate

3.1%

3.1%

3.0%

CHF

CPI (MoM)

0.1%

0.2%

0.6%

EUR

German Factory Orders (MoM)

2.2%

0.5%

0.6%

CAD

Building Permits (MoM)

4.7%

-1.5%

7.6%

Economic Events for May 8, 2012

00:01 GBP RICS House Price Balance -10% -10%

02:30 AUD Trade Balance -1.40B -0.48B

06:45 CHF GDP 0.1%

06:45 CHF SECO Consumer Climate -18 -19

13:15 CAD Housing Starts 202K 216K

Government Bond Auctions (this week)

Date Time Country

May 08 09:15 Austria

May 08 09:30 Belgium

May 08 14:30 UK

May 08 15:30 Italy

May 08 17:00 US

May 09 09:10 Sweden

May 09 09:30 Germany

May 09 09:30 Swiss

May 09 09:30 UK

May 09 14:30 Sweden

May 09 15:30 Italy

May 09 17:00 US

May 10 15:00 US

May 10 17:00 US

May 11 09:10 Italy BOT auction

May 11 10:00 Belgium

Click here for updated USD/CAD News.

Originally posted here