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USD/CAD Fundamental Analysis, May 6, 2015 – Forecast

usdcad tuesday bnsAnalysis and Recommendations:

The USD/CAD is up by 9 points at 1.2109 as the US dollar recovers after a strong factory orders print yesterday and positive comments from several Fed speakers. Stronger oil prices helped the Loonie  to rally over the past few days. In the note to clients released Monday, Ian Gordon and John Shin, two analysts at Bank of America Merrill Lynch, raised their forecasts for the Canadian dollar, dubbed the loonie, a popular nickname for the Canadian currency. They now believe that one U.S. dollar will be worth 1.27 Canadian dollars by year-end, cut from 1.30, and 1.21 Canadian dollars by year-end 2016, down from 1.23.

Cratering crude-oil prices, broad strength in the U.S. dollar and the Bank of Canada’s “stunning” January rate cut accelerated the pace of the Canadian dollar’s decline in 2015, pushing it to a more than six-year-low against the dollar in mid-March.

Stephen Poloz, Governor of the BoC claims that the Canadian dollar’s recent strength on optimism about the nation’s economy is too much of a good thing.

A shift to a brighter outlook by the Bank of Canada governor in April helped propel the currency to its biggest monthly rally in almost six years against its U.S. counterpart. The problem is that a weaker exchange rate is exactly what the central bank says is needed to sustain the expansion.

ForexTraq 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.

Today’s economic releases actual vs. forecast:

Cur.

 

Event

Actual

Forecast

Previous

 

 

 

 

Japan – Greenery Day

  AUD

 

Trade Balance (Mar)

-1.322B

-1.000B

-1.609B

   

  AUD

 

Interest Rate Decision (May)

2.00%

2.00%

2.25%

 

 

  AUD

 

RBA Rate Statement  

 

 

 

 

 

  EUR

 

Spanish Unemployment

-118.9K

-64.8K

-60.2K

 

 

  GBP

 

Construction PMI (Apr)

 

57.5

57.8

   

 usdcad tuesday

Upcoming Economic Events that you should be monitoring:

Wednesday, May 6, 2015

Cur.

 

Event

Actual

Forecast

Previous

 

 

 

 

Japan – Greenery Day

  NZD

 

Employment Change (QoQ) (Q1)

 

0.8%

1.2%

 

 

  AUD

 

Retail Sales (MoM) (Mar)

 

0.4%

0.7%

 

 

  GBP

 

Services PMI (Apr)

 

58.5

58.9

 

 

  USD

 

ADP Nonfarm Employment

 

200K

189K

 

 

  USD

 

Fed Chair Yellen Speaks  

 

 

 

 

 

  CAD

 

Ivey PMI (Apr)

 

49.2

47.9

   

Government Bond Auctions

Date Time Country

May 05 09:15 Austria Eur 1.1bn 3.5% Sep 2021

May 06 09:03 Sweden Sek 2bn 3.5% Jun 2022

May 06 09:10 Greece Eur 0.875bn 6 month (Nov 2015) T-bills

May 06 09:30 Germany Eur 5bn Jun 2017 Schatz

May 07 08:30 Spain Auctions 0.5% Oct 2017 Bono, 0.55%

May 07 09:10 France Auctions OATs

May 07 09:10 Sweden Holds inflation-linked bond auction

May 08 10:00 Norway Details bond auction on 12 May

May 08 15:30 Italy Announces details of BTP

May 12 09:15 Norway Holds bond auction

May 13 09:10 Italy Auctions BTPs/CCTeus

May 13 09:30 Germany Eur 3bn Feb 2025 Bund

May 13 14:30 Sweden Details bond auction on 20 May

May 14 09:30 UK Auctions 2% 2020 Conventional Gilt

 

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