USD/CAD Fundamental Analysis, March 13, 2015 – Forecast

Analysis and Recommendations:

The USD/CAD dipped 59 points to 1.2688 as the greenback eased down a bit and gold and oil prices traded in the green.  Traders will be closely monitoring US data later in the day. Major currencies, including Canada’s loonie, have been struggling against the rising strength of the U.S. dollar as the American economy revives and the U.S. Federal Reserve prepares to raise key lending rates for the first time in years. The Canadian dollar is also affected by weak demand and prices for key commodities, particularly oil that are important for its export trade.  The Royal Bank downgraded Thursday its latest forecast for the Canadian economy in 2015 after a sharp drop in energy prices. The bank projects Canada’s real GDP to grow by 2.4 per cent this year — a reduction of 0.3 percentage points from its forecast issued last December. RBC said while the drop in energy prices is a negative for the oil and gas sector, much of the weakening will be offset by stronger consumer spending and exports.

Canada’s dollar weakened on Wednesday as the U.S. greenback continued to wreak havoc on international currencies. The pullback added to a drop of more than half a cent on Tuesday, as traders bet that U.S. interest rates may start to move up a bit sooner than expected. Today the currency was able to gain as the US dollar gave back some of its gains after a dip in retail sales.

Currency watchers note the U.S. dollar is stronger against many currencies as the U.S. Federal Reserve prepares to raise its key interest rates at some point, which has yet to be announced.

“The Canadian dollar continues to get hammered by broad based U.S.-dollar strength,” wrote Knightsbridge Foreign Exchange Rahim Madhavji in a note.

“Friday’s employment data in Canada will be an important catalyst to watch and could dictate the next move up in the U.S. dollar if Canadian jobs data is weak. Oil inventory data is being closely watched and increasing inventories is negative for the Canadian dollar.”

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 up to the data analysis and information in our weekly reports.

Today’s economic releases actual vs. forecast:

 

Upcoming Economic Events that you should be monitoring:

Friday, March 13, 2015

Government Bond Auctions

Date Time Country

Mar 18 11:30 Germany Eur 4bn Feb 2025 Bund

Mar 18 16:30 Sweden Details bond sale on 25 Mar

Mar 19 11:10 France Auctions BTANs

Mar 19 12:10 France Auctions OATi

Mar 19 11:10 Sweden Holds inflation-linked bond auction

Mar 19 11:30 UK Auctions conventional Gilt

Mar 19 17:00 US Announces 2-yr FRN, plus 2/5/7 yr Notes

Mar 19 19:00 US Auctions 10-yr TIPS