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16 Sep 2015
USDCAD: Data on tap, medium term bearish outlook - TDS
FXStreet (Delhi) – Research Team at TDS, suggest that even though we have a set of data in US CPI and Canadian manufacturing sales, neither one is likely to elicit much of a reaction out of USDCAD ahead this week’s main event.
Key Quotes
“The market in looking for core CPI to nudge higher to 1.9% y/y. While this metric bumps along target we do not foresee significant upside pressures on core inflation over the medium-term as the strong USD and global excess capacity imply disinflation remains the more prominent threat.”
“On the Canadian data front, manufacturing sales are forecast to rise by 0.4% m/m in July following a 1.2% print in June. Our forecast reflects strength in transportation with weakness in the extraction industry but the more important metric to watch will be the total volumes number which we think could dip into negative territory and serve as an early drag on industry-level real GDP.”
“So, we remain cautious on the Canadian economy and consequently on the CAD. We remain bearish on a medium-term perspective and have penciled in 1.37 at the turn of the year.”
Key Quotes
“The market in looking for core CPI to nudge higher to 1.9% y/y. While this metric bumps along target we do not foresee significant upside pressures on core inflation over the medium-term as the strong USD and global excess capacity imply disinflation remains the more prominent threat.”
“On the Canadian data front, manufacturing sales are forecast to rise by 0.4% m/m in July following a 1.2% print in June. Our forecast reflects strength in transportation with weakness in the extraction industry but the more important metric to watch will be the total volumes number which we think could dip into negative territory and serve as an early drag on industry-level real GDP.”
“So, we remain cautious on the Canadian economy and consequently on the CAD. We remain bearish on a medium-term perspective and have penciled in 1.37 at the turn of the year.”