USD/CAD Breaks Above 1.30 as Lower Commodity Prices Crush Loonie

By Unknown

Sabtu, 03 September 2016

USD/CAD Breaks Above 1.30 as Lower Commodity Prices Crush Loonie

The USD touched highs of 10 the year compared to the DAC after prices of products base were affected by the disappointing results of the Chinese PMI. An oversupply of crude and lower demand pushed prices below $ 50 and to the Canadian economy into a quagmire. The Bank of Canada was forced to cut its benchmark interest rate by 25 basis points on July 17 and there is growing expectation that the Federal Reserve will finally raise interest rates before the end of 2015 . the three factors continue to push the USD / CAD highest first plan next week when the Fed will release its FOMC announcement.

The loonie has lost almost 23 percent since touching parity in 2013. The decline in oil prices forced the Bank of Canada as an alternative strategy to give exporters an advantage through currency depreciation. It's a long shot given the manufacturing base lost over the past 10 years, the industry has moved offshore. Services are led gains in exports, but they face the highest global competition. The Canadian economy is trying to shake off a mild recession and it has the risk of being left in the US economy may hit a pace of sustainable growth.

USD / CAD broke the psychological level of 1.30 and will get limited support oil prices next week. A hawkish FOMC with further weakness in global demand for commodities could push the CAD down because it will be very limited release of economic indicators next week that could make the case for a strong dollar

events CAD to watch this week :.

Friday, July 31
8:30 CAD GDP m / m

* All times EDT
For a full list of events planned for the visit Foreign exchange MarketPulse economic calendar

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