The Canadian dollar is due to a weak USD and a Surging Oil Prices
CAD peaked 10 months after the release of US gross domestic product advanced. The US economy grew 0.5 percent in the first three readings for the first quarter of 2016. The estimated GDP will get refined with 2 other versions, but at first glance, it shows the US economy is slowing after an uneven 2015
central banks have been the main drivers of market activity, but they have not made their mark with their actions, but staying behind the scenes. The market expects the Fed to sit this one out and if possible send some advice on monetary policy for the next two meetings. The statement April Federal Open Market Committee (FOMC) on Wednesday was almost a reprint of the declaration in March that did not allude strongly to June verbatim, but do not ignore that there is a rate increase.
The Bank of Japan has shocked and unlike their now famous "Halloween Surprise" of 2014, the central bank has not added to its huge stimulus program. The yen appreciated 3.2 percent because it is feared that the Bank of Japan could be short of ammunition even as he said that the value of the currency. Keep the rhetoric from the central bank BOJ Governor Haruhiko Kuroda said they will wait for the effects of negative rates before committing to other monetary policy actions.
USD / CAD lost 0,742 in the last 24 hours. The USD was on the back foot since March FOMC clearly there would be less of Fed rate increases this year than previously thought. The FOMC April did little to change that and while not taking a June rate hike from the table, the chances are still low; which translates to dollar weakness. The CAD continues to focus on soft US data and the surge in oil prices. The high correlation with crude took the loonie down to 10 months. The USD / CAD is trading above the 1.25 price after weaker than expected US went along gross domestic product (GDP).
The Canadian economy posted positive data from the market shock in January that China's actions and the spiral in oil prices down. Canada reported monthly GDP surprised on the upside for two months in a row and then that data published in April is intended as a slight slowdown to 0.1 percent. The weakness of the CAD in the first quarter could stimulate the economy to show a gain although it probably will not be as large as the 0.6 percent released at the end of March.
The Bank of Canada (BoC) was optimistic about the ability of the economy to diversify resources with a potential target of 2 years. Rising oil prices will make this difficult diversification because it will also trigger currency appreciation making exports less competitive. It remains to be seen if the US slowdown is a transient effect or a sign that the Fed should worry. Energy demand has not increased significantly which means all crude price strength rests on the shoulders of the freeze agreement of oil production. Even when the Organization of Petroleum Exporting Countries (OPEC) and Russia agreed to disagree on oil prices remained offer. The next meeting will be the key as a production freeze is a good start, but the demand will still result in an oversupply increasingly.
Canadian data will make an impression that the monthly GDP will be released on Friday, April 29 at 08:30 EDT. Even with small expectations of contraction in the Canadian economy has defied predictions of the end and the softer dollar in the first quarter could further stimulate the same growth Canada's largest trading partner seems to slow
CAD events to watch this week .:
Friday, April 29
8:30 CAD GDP m / m
Saturday, April 30
21: 00 CNY manufacturing PMI
* All EDT
hours for a full list of events planned in the foreign exchange market check the economic calendar MarketPulse
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