Forex Market Analysis About USD/CAD
In this article, first published on PrimePair.com, I discussed about the tentative fundamental outlook regarding the USD/CAD kept the pair range bound.
Tentative Outlook for the Canadian Economy is Keeping the Loonie Range Bound
Regardless of the optimistic fundamental data, the Ivey PMI has remained dovish. In February, the Ivey PMI reading came out at only 45.4 and the forecast for March is set at a slightly higher figure, at 46.2. It is important to keep in mind that a reading below 50 indicates industry contraction. Furthermore, the trade balance figure is due on Friday, which is directly correlated to the currency demand in the interbank market. Currently, the forecast for the Canadian trade balance is set at 0.3 billion. Still a positive sign, but it is significantly lower compared to the 2.1 billion trade balance from September 2014.
It appears that the market is still tentative regarding the first quarter performance of the Canadian economy. A senior economist from the Bank of Montreal, Robert Kavcic, commented on the current market sentiment about the Canadian economy by saying that “We just haven’t had the full impact of lower oil prices filter through the economy yet.” Therefore, the BOC is “going to stand aside and see how the first quarter plays out,” he added.
You can read the full article here.