USD/CAD Weekly Fundamental Analysis – January 18-22, 2016 -Forecast

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Published: Jan 16, 2016, 07:44 GMT+00:00

Weekly Analysis and Recommendation: The USD/CAD hit a new high adding 175 points on Friday as commodity currencies tanked on safe haven trades. The CAD

USD/CAD Weekly Fundamental Analysis – January 18-22, 2016 -Forecast

Weekly Analysis and Recommendation:

The USD/CAD hit a new high adding 175 points on Friday as commodity currencies tanked on safe haven trades. The CAD was also hit hard by the drop in oil prices. The Canadian dollar seems to have no support and nowhere to get assistance. The pair is trading at 1.4541. A Bank of Canada rate cut is now the preferred bet as the Loonie seems in near free-fall. The Dollar still carries the glow of last month’s Fed hike and there is a new – and traditionally favorable – wind blowing in the currency’s favor: risk aversion.

Oil’s slide continued this week, with the price of WTI closing below $30 US a barrel for the first time since 2003. As did the loonie, which traded below 69 cents US. That’s within striking distance of the all-time low of just under 62 cents the loonie touched in January 2002.

The short-term outlook for both isn’t looking much better. In our most-read story this week, we told you about the prediction of Macquarie Bank’s David Doyle, who sees the loonie bottoming out at around 59 cents US later this year.

That would be precedent-setting, and it’s all the more intriguing since Doyle has a pretty good track record on the loonie. He correctly predicted the loonie would hit 69 cents back in February — a time when the Canadian dollar was flying relatively high at more than 80 cents US.

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 recent analysis and information in our weekly reports and we provide daily updates and outlooks.

Major Economic Events for the week:

Time	Cur.	Event	Actual	Forecast	Previous
Monday, January 18, 2016
		United States – Martin Luther King, Jr. Day
Tuesday, January 19, 2016
	CNY	GDP (QoQ) (Q4)		1.7%	1.8%
	CNY	GDP (YoY) (Q4)		6.8%	6.9%
	CNY	Industrial Production (YoY) (Dec)		6.0%	6.2%
	GBP	CPI (YoY) (Dec)		0.2%	0.1%
	EUR	German ZEW Economic Sentiment (Jan)		9.0	16.1
	EUR	CPI (YoY) (Dec)		0.2%	0.2%
Wednesday, January 20, 2016
	NZD	CPI (QoQ) (Q4)			0.3%
	GBP	Average Earnings Index +Bonus (Nov)		2.1%	2.4%
	GBP	Claimant Count Change (Dec)		2.5K	3.9K
	USD	Building Permits (Dec)		1.200M	1.282M
	USD	Core CPI (MoM) (Dec)		0.2%	0.2%
	CAD	Interest Rate Decision		0.50%	0.50%
Thursday, January 21, 2016
	EUR	Interest Rate Decision (Jan)			0.05%
	USD	Philadelphia Fed Manufacturing Index		-5.0	-10.2
	USD	Crude Oil Inventories			0.234M
Friday, January 22, 2016
	EUR	German Manufacturing PMI (Jan)		53.0	53.2
	GBP	Retail Sales (MoM) (Dec)		-0.3%	1.7%
	CAD	Core CPI (MoM) (Dec)		-0.3%	-0.3%
	CAD	Core Retail Sales (MoM) (Nov)		0.4%
	USD	Existing Home Sales (Dec)		5.20M	4.76M