Analysis and Recommendations (USD CAD Forecast 2015):
The USD/CAD gained 29 points to trade at 1.2074 seemingly immune to the US dollar movements and the better than expected IVEY PMI report yesterday. The Canadian dollar had bounced higher today, moving in a wide range to best the 83-cent mark. It’s largely because of a weaker U.S. currency, rather than anything to do with Canada, however. The loonie “has quietly been the strongest major currency in the world over the past three months, after a brutal January,” noted BMO chief economist Douglas Porter.
The currency slumped by a “whopping” 9 per cent in January, marking the second-largest monthly erosion on record, he said. “After a shaky couple months, it bottomed in mid-March and has since risen about 6 per cent from the nadir (even with the pullback in recent days),” he said in his report late yesterday.
With oil prices remaining near their highest point this month and the US dollar weakening after a lackluster ADP payroll print the CAD has been the benefactor. Weak U.S. indicators also added to uncertainty regarding when the first rate hike by the Fed could take place. Data on Wednesday showed tepid private job gains and a second straight quarterly decline in productivity.
Shrinking expectations for an early rate hike – a tightening in June appears less and less likely – weighed on the dollar and helped its counterparts like the yen and euro.
In commodities, U.S. crude slipped on profit taking following an overnight climb to 2015 peaks reached after a first drawdown in U.S. crude inventories since January. U.S. crude was down 1.1 percent at $60.28 a barrel after reaching a five-month high of $62.58 on Wednesday.
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:
|AUD||Employment Change (Apr)||-2.9K||5.0K||48.2K|
|AUD||Full Employment Change (Apr)||-21.9K||41.3K|
|AUD||Unemployment Rate (Apr)||6.2%||6.2%||6.1%|
|EUR||German Factory Orders (MoM)||0.9%||1.5%||-0.9%|
|RUB||Central Bank reserves (USD)||353.5B|
|USD||Initial Jobless Claims||280K||262K|
Upcoming Economic Events that you should be monitoring:
Friday, May 8, 2015
|CNY||Trade Balance (Apr)||39.45B||3.08B|
|USD||Nonfarm Payrolls (Apr)||224K||126K|
|USD||Unemployment Rate (Apr)||5.4%||5.5%|
|CAD||Employment Change (Apr)||-5.0K||28.7K|
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