Canada's trade balance brought bad news for the economy at the beginning of the north session -américain trade. The deficit was wider in May at CAD 3280000000 exceeded the forecast of 2.7 billion CAD. Exports have not increased as much as the Bank of Canada (BoC) provided with the depreciation of the CAD. The losses in the commodity sector have been severe, first because of the price of lower energy and secondly wildfires in Alberta are not fully reflected in terms of cost.
The US trade balance has also expanded in May to a deficit of $ 41.1 billion in a strong dollar, it was difficult for exports to grow as the cheaper imports were favored by consumers. The trade deficit between the United States and China reached a peak of 8 months with E.Ü. widening gap also.
The Federal Open Market Committee (FOMC) June meeting minutes were released and as expected the concerns with the use of the US after the disappointing US nonfarm payrolls (NFP) and then come to vote Brexit required members of Fed rate increases. There was a division between the Fed with different views on the economic outlook, but in the late caution won. The results of the vote Brexit validated the patience of the US Federal Reserve, but as a return to risk on the USD market was weaker against the major pairs.
USD / CAD lost 0.403 percent in the last 24 hours. The pair is trading at 1.2963. The minutes pacifists were put in a new context in the wake of the referendum in EU UK. If the FOMC members are not in the US ideal economic conditions for an increase in rates in June, now with the vote, they become less. The market had already prices in a lack of Fed hikes for this year and next, but the minute status quo are ready more credibility to the possibility of negative interest rates sooner rather than later.
West Texas Oil rose 1.19 percent after the retirement of the USD and boosted the loonie. The price of energy has had a volatile session with low to $ 45.64 to finish trading near daily highs at $ 47.03. basic energy have not changed because there is still much more production than expected demand, but with anxiety Brexit still infect markets there is more expected volatility until there is political stability in Britain.
The Canadian dollar was able to gain their gains against the USD as it lost the support of risk aversion and the minutes and the trade data have taken its toll on the big dollar. The Bank of Canada (BoC) will keep interest rates unchanged next week, but is expected to downgrade its growth forecasts for the Canadian economy in 2016. A rate cut is still possible this year, especially if the winds contrary macro keep winning force after the referendum Brexit shocked global markets.
Tomorrow will be a quiet day for Canadian releases, but the highlight will come with the first data on employment in the US for the week. The data on ADP employment and unemployment claims will begin to paint a picture on the status of jobs in America. US non farm employment (NFP) will be released on Friday with much anticipation and could prove a point to a return to market fundamentals after the referendum in the UK turning
CAD events to watch this week:.
Thursday, July 7
4:30 GBP Manufacturing Production m / m
8:15 USD ADP Non-Farm Employment Change
8:30 USD Unemployment Claims
Stocks 11:00 USD crude oil
Friday, July 8
8:30 CAD employment Change
8:30 CAD unemployment rate
8:30 USD Average hourly earnings m / m
USD 8:30 nonfarm employment change
8:30 USD unemployment
* All times EDT
for a complete list of events planned in the foreign exchange market, visit the MarketPulse economic Calendar
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