Here is the key factor to keep in mind today for US Dollar trades:
- US Leading Indicators: Leading indicators rose by only 0.1% in August which delivered yet another economic disappointment. Economists predicted an increase of 0.2% and forex traders can compare this to the 0.2% contraction which was released in July. The summer has been extremely unfriendly to the US. The majority of economic reports show a much weaker economy or an economy which is contracting. Leading indicators points towards a mild contraction over the past two months. The economic cool-down is the primary reason why the US Fed did not raise interest rates yesterday. Any potential interest rate increase would only speed up the slowdown and may push the US economy into an official recession. Forex traders should monitor the US economy as the NFP reports suggests a strong economy, but all other economic reports suggest the opposite. Since one reports shows a positive economy and the majority of all other reports show a weak economy, it is easy to single out which reports paints the wrong economic picture of the state of the US economy.
Here is the key factor to keep in mind today for Canadian Dollar trades:
- Canadian CPI: The CPI was unchanged at 127.3 in August which was what economists predicted and also the same level which was reported for July. The CPI showed a level of 0.0% monthly, but did increase by 1.3% annualized. Economists predicted a level of 0.0% monthly and an increase of 1.3% annualized. Forex traders can compare this to July's increase of 0.1% monthly and 1.3% annualized. The core CPI rose 0.2% monthly and 2.1% annualized. Economists predicted an increase of 0.2% monthly and an increase of 2.1% annualized. Forex traders can compare this to July's level of 0.0% monthly and 2.4% annualized. The seasonally adjusted CPI also showed a level of 0.0% monthly and the seasonally adjusted core CPI rose by only 0.1%. The Canadian economy, as many others, are suffering from a decrease in inflation as a result of the sharp decrease in commodity prices which is pushing deflation to the foreground. Canada is heavily dependent on commodity exports.
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