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USD/CAD Fundamental Analysis, May 7, 2015 – Forecast

Analysis and Recommendations (USD/CAD Forecast):

The USD/CAD dipped 39 points to trade at 1.2029 following the US dollars decline ahead of this week’s jobs data. The CAD is powering up with oil and gold rebounding. The Canadian dollar strengthened some half a cent against its U.S. counterpart and rallied against other major currencies on Monday as crude prices rose to 2015 highs. The price of crude, a significant Canadian export, was bolstered by expectations China will inject stimulus into its economy following the latest set of soft data.

A new report says the country’s trade deficit grew at a higher-than-expected rate. The study shows the deficit grew to C$3 billion for March as growth in exports failed to match growth in imports. Brent crude oil rose to $68 a barrel.

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
  NZD Employment Change (QoQ) 0.7% 0.8% 1.2%
  AUD Retail Sales (MoM) (Mar) 0.3% 0.4% 0.7%
  GBP Services PMI (Apr) 59.5 58.5 58.9
  USD ADP Nonfarm Employment 200K 189K
  USD Fed Chair Yellen Speaks

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Upcoming Economic Events that you should be monitoring:

Thursday, May 7, 2015

Cur. Event Actual Forecast Previous
  AUD Employment Change (Apr) 5.0K 37.7K
  AUD Full Employment Change (Apr) 31.5K
  AUD Unemployment Rate (Apr) 6.2% 6.1%
  EUR German Factory Orders (MoM) (Mar) 1.5% -0.9%
  RUB Central Bank reserves (USD) 353.5B
  USD Initial Jobless Claims 280K 262K
  CAD Building Permits (MoM) (Mar) 2.5% -0.9%

Government Bond Auctions

Date Time Country

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

USD/CAD Exchange Rate

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