USD/CAD Fundamental Analysis March 21, 2013 Forecast

Analysis and Recommendations:

The USD/CAD is trading at 1.0265 almost flat to yesterday’s close ahead of the FOMC decision and press conference due towards the end of the trading day. Traders can expect the Fed to issue a maintenance statement, which provides little new with regards to QE or the ultimate timing of interest rate hikes and that Esther George dissents due to potential risks of current policies. In terms of the Fed’s economic projections, even though the data has improved, do not expect a major upgrade to the outlook. The December GDP projections are still relatively robust ‐ the mid‐point of the central tendency Fed forecast is already well above the median of consensus estimates; with the Fed forecasting 2.65% GDP this year and consensus at just 1.9%. However traders should not be surprised to see a shift lower in inflation expectations. Finally, expect Chair Bernanke to sound relatively dovish in his press conference, similar in tone to his February 26th testimony, where he reiterated that labor is improving but is still weak.

The Canadian dollar rose for the first time in three days against its U.S. peer on speculation the European Central Bank’s pledge to provide liquidity to Cyprus will buy it time to renegotiate a financial bailout. The currency rose against the majority of its most traded peers before a report tomorrow forecast to show Canada’s retail sales increased in January after contracting the prior month. The U.S. Federal Reserve is projected to keep its benchmark interest rate at zero to 0.25 percent in its policy decision today, according to all 43 economists in a Bloomberg survey.

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.

Economic Data March 20, 2013 actual v. forecast

 

Upcoming Economic Events that affect the CAD and USD

Government Bond Auction

Date Time Country 

Mar 21 09:30 Spain

Mar 21 09:50 France

Mar 21 10:30 UK

Mar 21 10:50 France

Mar 21 16:30 Italy

Mar 21 15:00 US

Mar 21 17:00 US

Mar 22 16:30 Italy

Mar 25 10:10 Italy

Mar 25 10:30 Germany

Mar 25 11:30 Belgium

Mar 25 15:30 UK

Mar 26 09:10 Holland

Mar 26 10:10 Italy

Mar 26 10:30 UK

Mar 26 17:00 US

Mar 27 10:10 Italy

Mar 27 15:30 Sweden

Mar 27 17:00 US

Mar 28 01:30 Japan

Mar 28 15:30 UK

Mar 28 17:00 US