By FXEmpire.com
Introduction: 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%.
Weekly Analysis and Recommendation:
The USD/CAD ended the week on a strong note, moving up from 1.0336 on Thursday to close at 1.0167. After the USD tumbled on Friday as investors moved to more risk, on positive information from the EU Summit and above expected GDP. On Friday the CAD was strengthened when the GDP reported at 0.3% when forecast at 0.2%.
|
Date |
Open |
High |
Low |
Change % |
|
|
Jun 29, 2012 |
1.0167 |
1.0336 |
1.0340 |
1.0166 |
-1.64% |
|
Jun 28, 2012 |
1.0336 |
1.0252 |
1.0362 |
1.0232 |
0.82% |
|
Jun 27, 2012 |
1.0252 |
1.0243 |
1.0268 |
1.0238 |
0.09% |
|
Jun 26, 2012 |
1.0243 |
1.0289 |
1.0297 |
1.0234 |
-0.45% |
|
Jun 25, 2012 |
1.0289 |
1.0267 |
1.0318 |
1.0257 |
0.21% |
Canadian markets will start the week closed on Monday for the national Canada Day holiday that unofficially kicks off the short Canadian summer. They will then spend much of the rest of the week catching up to global events and then continuing to be driven by developments elsewhere at least until Friday when the June jobs report lands. After heaping on the strongest back-to-back monthly gains in March and April since 1981, job growth fell back to 7.7k in May and only because of a rise in self-reported self-employment within the household survey. Strip that effect out, and the country lost jobs which leaves us with a conundrum.
Weakness from last Fall onward and then renewed weakness in May would suggest as much and perhaps owe itself to a variety of distorting influences to job growth that we’ve noted in the past. What also mitigates the enthusiasm into spring is the fact that two months worth of strong job growth pale in comparison to the fact that inflation-adjusted wage growth is non-existent in Canada such that 17 million workers are, on average, earning nothing extra beyond increases in the cost of living. Two of the reasons for this might be continued job market slack with an unemployment rate of 7.3% that is higher yet after counting part-time workers who would rather be working full time, and public sector wage moderation as some come under closer fiscal scrutiny
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 recent analysis and information in our weekly reports and we provide daily updates and outlooks.
Major Economic Events for the week of June 25 – 29 actual v. forecast for the Canadian & US Dollar
|
Date |
Currency |
Event |
Actual |
Forecast |
Previous |
|
Jun 25 |
USD |
New Home Sales |
369K |
347K |
343K |
|
Jun 26 |
USD |
S&P/CS Composite-20 HPI y/y |
-1.9% |
-2.4% |
-2.6% |
|
USD |
CB Consumer Confidence |
62.0 |
63.8 |
64.4 |
|
|
Jun 27 |
USD |
Core Durable Goods Orders m/m |
0.4% |
0.9% |
-0.6% |
|
USD |
Durable Goods Orders m/m |
1.1% |
0.5% |
-0.2% |
|
|
USD |
Pending Home Sales m/m |
5.9% |
1.2% |
-5.5% |
|
|
USD |
Crude Oil Inventories |
-0.1M |
-0.5M |
2.9M |
|
|
Jun 28 |
USD |
Unemployment Claims |
386K |
385K |
392K |
|
USD |
Final GDP q/q |
1.9% |
1.9% |
1.9% |
|
|
Jun 29 |
CAD |
GDP m/m |
0.3% |
0.2% |
0.1% |
|
CAD |
RMPI m/m |
-1.0% |
-1.3% |
-2.0% |
|
|
USD |
Core PCE Price Index m/m |
0.1% |
0.2% |
0.1% |
|
|
USD |
Personal Spending m/m |
0.0% |
0.1% |
0.1% |
|
|
USD |
Chicago PMI |
52.9 |
52.8 |
52.7 |
|
|
USD |
Revised UoM Consumer Sentiment |
73.2 |
74.2 |
74.1 |
Historical:
Highest: 1.0842 CAD on Nov 01, 2009.
Average: 1.0147 CAD over this period.
Lowest: 0.9407 CAD on Jan 26, 2011.
Economic Highlights of the coming week that affect the Canadian and American Markets
|
Date |
Time |
Currency |
Event |
Forecast |
Previous |
|
Jul 2 |
10:00am |
USD |
ISM Manufacturing PMI |
52.1 |
53.5 |
|
Jul 3 |
10:00am |
USD |
Factory Orders m/m |
0.1% |
-0.6% |
|
Jul 5 |
8:15am |
USD |
ADP Non-Farm Employment Change |
101K |
133K |
|
8:30am |
USD |
Unemployment Claims |
385K |
386K |
|
|
10:00am |
USD |
ISM Non-Manufacturing PMI |
53.1 |
53.7 |
|
|
11:00am |
USD |
Crude Oil Inventories |
-0.1M |
||
|
Jul 6 |
8:30am |
CAD |
Building Permits m/m |
-0.7% |
-5.2% |
|
8:30am |
CAD |
Employment Change |
5.2K |
7.7K |
|
|
8:30am |
CAD |
Unemployment Rate |
7.3% |
7.3% |
|
|
8:30am |
USD |
Non-Farm Employment Change |
92K |
69K |
|
|
8:30am |
USD |
Unemployment Rate |
8.2% |
8.2% |
|
|
10:00am |
CAD |
Ivey PMI |
55.1 |
60.5 |
Click here a current USD/CAD Chart.
Originally posted here
