By FX Empire.com
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%.
USD/CAD Weekly Fundamental Analysis March 5-9, 2012, Forecast
Analysis and Recommendation:
The USD/CAD is trading at .9892 and it’s been a steady fall all week from 100.46 earlier in the week. The CAD is simply marching along with the USD, which was weak earlier in the week with commodity prices soaring and the euro pushing up in record trading. The markets this week have settled down and the USD has recovered with good solid economic news. A lessening of political tensions has allowed oil to fall and Fed Chairman Bernanke took the inflation out of gold.
Only Good News from the US:
Existing home sales US existing home sales picked up unexpectedly in January, but the previous figures were downwardly revised.
Initial jobless claims US initial jobless claims stayed unchanged in the week ending February the 18th, while the consensus was looking for an increase.
University of Michigan consumer confidence The final figure of Michigan consumer confidence for February showed a strong upward, revision from 72.5 to 75.3, while only a minor one was expected.
New home sales After increasing for four consecutive months, US new home sales dropped at the start of 2012.
Federal Reserve Chairman Bernanke testified before the Senate, this week, the markets found his comments a bit dovish and drew conclusions that any additional QA was off the table for the time being. Although the Chairman warned that the economy was recovering, he stated it was fragile and he was still worried about jobs. Gold soared on his comments.
Historical:
Highest: 1.0842 CAD on 01 Nov 2009.
Average: 1.0147 CAD over this period.
Lowest: 0.9435 CAD on 26 Jul 2011.
Economic Events (GMT)
| Mar. 06 | 15:00 | CAD | Ivey PMI |
| Mar. 07 | 13:15 | USD | ADP Nonfarm Employment Change |
| Mar. 08 | 13:30 | USD | Initial Jobless Claims |
| 14:00 | CAD | Interest Rate Decision | |
| Mar. 09 | 02:00 | CNY | Chinese CPI (YoY) |
| 13:30 | USD | Nonfarm Payrolls | |
| 13:30 | CAD | Trade Balance | |
| 13:30 | USD | Trade Balance | |
| 13:30 | USD | Unemployment Rate |
1st of the month global economic data releases actual v. forecast
|
AUD |
Building Approvals (MoM) |
0.9% |
2.1% |
-1.0% |
|
AUD |
Private New Capital Expenditure (QoQ) |
-0.3% |
3.9% |
14.6% |
|
INR |
Indian Trade Balance |
-14.8B |
-11.0B |
-12.7B |
|
CHF |
GDP (QoQ) |
0.1% |
-0.1% |
0.3% |
|
GBP |
Nationwide HPI (MoM) |
0.6% |
0.3% |
-0.3% |
|
CHF |
SVME PMI |
49.0 |
48.5 |
47.3 |
|
EUR |
French Manufacturing PMI |
50.0 |
50.2 |
50.2 |
|
EUR |
German Manufacturing PMI |
50.2 |
50.1 |
50.1 |
|
EUR |
Manufacturing PMI |
49.0 |
49.0 |
49.0 |
|
PLN |
Polish GDP (YoY) |
4.3% |
4.2% |
4.2% |
|
GBP |
Manufacturing PMI |
51.2 |
52.0 |
52.0 |
|
EUR |
CPI (YoY) |
2.7% |
2.6% |
2.6% |
|
EUR |
Unemployment Rate |
10.7% |
10.4% |
10.6% |
|
USD |
Core PCE Price Index (MoM) |
0.2% |
0.2% |
0.1% |
|
CAD |
Current Account |
-10.3B |
-9.6B |
-12.3B |
|
USD |
Personal Spending (MoM) |
0.2% |
0.4% |
0.0% |
|
USD |
Initial Jobless Claims |
351K |
353K |
353K |
|
USD |
Continuing Jobless Claims |
3402K |
3400K |
3404K |
|
USD |
ISM Manufacturing Index |
52.4 |
54.6 |
54.1 |
|
USD |
Fed Chairman Bernanke Testifies | |||
|
KRW |
South Korean CPI (YoY) |
3.1% |
3.5% |
3.4% |
|
JPY |
Unemployment Rate |
4.6% |
4.5% |
4.6% |
|
JPY |
Tokyo Core CPI (YoY) |
-0.3% |
-0.4% |
-0.4% |
Government Bond Auction Schedule
Mar 05 10:10 Norway Bond auction
Mar 06 10:10 Greece Auctions 6M T-bills
Mar 06 10:15 Austria Bond auction
Mar 06 10.30 UK Auctions 0.75% 2034 I/L Gilt
Mar 06 15:30 UK Details gilt auction on Mar 15
Mar 07 10:10 Sweden Nominal bond auction
Mar 07 10:30 Germany Eur 4.0bn Feb 2017 Bobl
Mar 07 10.30 UK Auctions new Sep 2017 conventional Gilt
Mar 08 16:00 US
Announces auctions of 3Y Notes on Mar 12, 10Y Notes on Mar
13 & 30Y Bonds on Mar 14
Originally posted here
