By FX Empire.com
Economic Events
Please check the daily forecast for details on all economic events.
Major Economic Events of the Week
|
Feb. 14 |
10:00 |
EUR |
German ZEW Economic Sentiment |
|
13:30 |
USD |
Core Retail Sales (MoM) |
|
|
13:30 |
USD |
Retail Sales (MoM) |
|
|
Feb. 15 |
07:00 |
EUR |
German GDP (QoQ) |
|
09:30 |
GBP |
Claimant Count Change |
|
|
10:30 |
GBP |
BoE Inflation Report |
|
|
10:30 |
GBP |
BoE Gov King Speaks |
|
|
19:00 |
USD |
FOMC Meeting Minutes |
|
|
Feb. 16 |
13:30 |
USD |
Initial Jobless Claims |
|
Feb. 17 |
09:00 |
EUR |
German Ifo Business Climate Index |
|
09:30 |
GBP |
Retail Sales (MoM) |
|
|
12:00 |
Core CPI (MoM) |
||
|
13:30 |
USD |
Core CPI (MoM) |
|
|
13:30 |
USD |
CPI (MoM) |
Historical:
Highest: 1.0842 CAD on 01 Nov 2009.
Average: 1.0147 CAD over this period.
Lowest: 0.9435 CAD on 26 Jul 2011.
USD/CAD Weekly Fundamental Analysis February 13-17, 2012, Forecast
Rule:
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%.
Trading Ideas
1) if you believe the price of oil will keep rising, it might be a good strategy to buy the Canadian dollar because it’s 81% positive correlation to oil over the past years.
2) Since the USD/CAD pair tends to be highly correlated to oil, it might be a good idea to compare both Canadian dollar and oil charts in order to predict future moves, if for example oil breaks above an important resistance level and USD/CAD didn’t break resistance level yet, the USD/CAD is very likely to break above also. This illustrates how oil tends to lead the move ahead of USD/CAD.
Analysis and Recommendation:
The USD/CAD closed down at 1.0113 after peaking earlier at 1.0038
As with all currencies pairs this week, all economic data was overlooked and news and rumors held the stage centered on Greece, most movement in the pair followed the Greek activity for the week.
News was just released that Greece had passed the new legislation required by the EU
The Greek Finance Minister was sent packing back to Greece. The original news stated that the EU was demanding final legislation of the austerity measures before they would consider the approval of the bailout and that they did not want promises. Further news seemed to indicate that the political agreements were short, even with the ECB’s added contributions and agreements to reduce their asset valued.
Most recent reports said that Germany made it clear that Greece missed its debt target and must increase its austerity measures to qualify for the second economic bailout package.
The German Finance Ministry went on to state, “The Greek offer is not sufficient and they have to go away to come back with a revised plan.”
The Strength
1) Initial Jobless Claims fall to 358k, 12k less than expected and the 4 week average drops to 366k, the least since May ’08
2) Job Openings in monthly BLS data rise to match the highest since Sept ’08
3) MBA said avg 30 yr mortgage rate falls to new low of 4.05% and refi’s jump 9.4%
4) German Factory Orders in Dec rise a bit more than expected
5) China’s PPI moderates to a gain of just .7% y/o/y, the slowest rate since Nov ’09
6) Indonesia unexpectedly cuts rates to 5.75% while RBA and SK sit pat
The Weakness
1) Greece on brink, AGAIN, unemployment rate in Nov hits 20.9% from 18.2% in Oct
2) German exports in Dec, the main driver of their economy, falls 4.3% m/o/m vs an expected decline of just 1%, German IP falls 3% vs est of flat from Nov
3) Euros being redeposited with the ECB overnight remain around 500b, matching the amount borrowed under the LTRO
4) BoE votes for more QE, brings asset purchase program up to 325b pounds.
Economic Results for the previous week, actual v. forecast
|
Feb. 06 |
15:00 |
CAD |
Ivey PMI |
64.1 |
57.8 |
63.5 |
|
Feb. 07 |
03:30 |
AUD |
Interest Rate Decision |
4.25% |
4.00% |
4.25% |
|
03:30 |
AUD |
RBA Rate Statement |
||||
|
15:00 |
USD |
Fed Chairman Bernanke Testifies |
||||
|
Feb. 08 |
21:45 |
NZD |
Unemployment Rate |
6.3% |
6.5% |
6.6% |
|
Feb. 09 |
01:30 |
CNY |
Chinese CPI (YoY) |
4.5% |
4.0% |
4.1% |
|
12:00 |
GBP |
Interest Rate Decision |
0.50% |
0.50% |
0.50% |
|
|
12:45 |
EUR |
Interest Rate Decision |
1.00% |
1.00% |
1.00% |
|
|
13:30 |
USD |
Initial Jobless Claims |
358K |
370K |
373K |
|
|
13:30 |
EUR |
ECB Press Conference |
||||
|
Feb. 10 |
13:30 |
CAD |
Trade Balance |
2.7B |
0.7B |
1.2B |
|
13:30 |
USD |
Trade Balance |
-48.8B |
-48.4B |
-47.1B |
Sovereign Bond Auction Schedule Feb 13-17
Feb 13 10:10 Italy BOT auction
Feb 13 10:10 Norway T-bill auction
Feb 13 10:30 Germany Eur 4.0bn Aug 2012 Bubill
Feb 13 12:00 Norway Details bond auction on Feb 20
Feb 14 09:30 Netherlands Eur 3.0bn-4.0bn Jan 2017 DSL
Feb 14 09:30 Spain 12 & 18M T-bill auction
Feb 14 10:10 Greece 3M T-bill auction
Feb 14 10:10 Italy BTP/CCTeu auction
Feb 14 10:30 Belgium Auctions 3 & 12M T-bills
Feb 15 10:10 Sweden Auctions T-bills
Feb 15 10:30 Portugal Eur 1.5-1.75bn May & Aug T-bills
Feb 16 09:30 Spain Obligacion auction
Feb 16 10.30 UK Auctions 4.5% 2034 conventional Gilt
Feb 16 10:50 France BTA/OATi auction
Feb 16 16:00 US
Announces auctions of 2Y Notes on Feb 21, 5Y Notes on Feb
22 & 7Y Notes on Feb 23
Feb 16 18:00 US Auctions 30Y TIPS
Originally posted here
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