​VBCE Weekly Foreign Exchange Wrap Up for Aug. 15 – Aug. 19, 2016

Steve Brown, Senior Corporate Trader | Stevebrown@vbce.ca

The CAD was the best performing currency through Thursday before weaker than

expected retail sales and inflation readings saw the CAD lose ground on Friday. Oil

prices gained another $8 this week for a net 20% gain over the past 7 days. The USD

came under pressure after the release of Wednesday's U.S. Fed meeting minutes.

Although key Fed speakers had boosted the USD earlier that day with some bullish

comments, the Fed minutes revealed that voting members were divided over whether

recent economic data showed that the U.S. economy was strong enough to support a rate

hike. USDCAD fell to a 2 month low of 1.2765 Thursday before climbing to 1.2892 on

Friday. Although the CAD managed to hold gains vs. the AUD and USD, it lost ground

vs. the EUR, GBP, and JPY after Friday's sell-off.

Weekly Open Low High Weekly Close

USDCAD 1.2953 1.2765 1.2973 1.2868

EURCAD 1.4461 1.4432 1.4592 1.4571

GBPCAD 1.6749 1.6612 1.6878 1.6825

JPYCAD 0.01278 0.01274 0.01288 0.01283

AUDCAD 0.9909 0.9762 0.9952 0.9816

Themes for the week:

*USDCAD sees daily closes below 1.2935 and 1.2862 support levels putting pressure on

the downside and testing 2 month low of 1.2765

*Downtrend comes to a halt – after the CAD enjoyed 9 consecutive daily gains vs USD,

it weakened by 1% on Friday

*Strong oil trend continues – now 7 consecutive daily gains (net 20% gain)

*Canadian retail sales disappoint: -0.8% (exp. 0.3% / prev. 0.8%)

*U.S. core CPI m/m: 0.1% (exp. 0.2% / prev. 0.2%) y/y: 2.2% (exp. 2.3% / prev. 2.3%)

*U.S. industrial production beats estimates: 0.7% (exp. 0.3% / prev. 0.4%)

*Canadian core CPI inflation flat m/m: 0% (exp. 0% / prev. 0%) y/y: 2.1% (exp. 2.1% /

prev. 2.1%)

On Tap for Next week:

Thursday, Aug. 25th: U.S. core durable goods orders: exp. 0.5% (prev. -0.4%)

Jackson Hole Economic Symposium (Thurs & Fri)

Friday, Aug. 26th: U.S. GDP Q2 (2nd reading): exp. 1.1% (prev. 1.2%)

U.S. Fed Yellen speech


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