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Fundamental Summary

USD

The BLS report on Friday shows figures that are worse than forecast. In August, total nonfarm payroll employment increased by 315,000, while the unemployment rate rose to 3.7%. A rate that is higher than expected should be interpreted as negative/bearish for the USD. Also, The Institute of Supply Management (ISM) Manufacturing Purchasing Managers Index (PMI) rose from 49.9 to 54.2 in August, exceeding market forecasts. The Manufacturing Purchasing Managers' Index (PMI) measures the activity level of purchasing managers in the manufacturing sector. Furthermore, according to payroll processor ADP, private sector hiring slowed in August due to a cooling of the labor market. As part of a revamped monthly report, the company said that private payrolls rose by 132,000 during the month, far below the consensus forecast of 300,000.

CAD

According to Statistics Canada, actual Building Permits were down by -6.6%, compared to a -0.5% estimate. Building Permits track the number of new building permits issued by the government and are a crucial indicator of housing market demand. Additionally, as estimated, Canada's GDP climbed in June by 0.1%, with real GDP increasing by 0.8% in the second quarter of this year. The Canadian economy increased at a 3.3% annual rate in the second quarter which was less than experts' expectations. Moreover, according to Statistics Canada, the country's current account surplus was C$2.7 billion in the second quarter, falling short of the C$6.6 billion predicted by analysts.

Our Opinion

Given the current balance of positive and negative influences affecting the USD/CHF and as long as the Fed maintains its aggressive policy and cyclical worries put pressure on risky assets, the fundamental outlook for the USD is "BEARISH" and for the CAD is "BEARISH".