ETFdb Weekly Watchlist: FXA, FXY Await Bank Rate Decisions, CNDA Hinges On Employment

by on August 5, 2013 | ETFs Mentioned:

Major U.S. equity indexes marched sideways most of last week as complacency over looming GDP data and FOMC policy hints prompted many to hold steady or wait on the sideline altogether. Much to everyone’s surprise, better-than-expected GDP data failed to ignite a rally while dovish comments from the Fed resulted in a muted sell-off. Amid the mixed sea of data and jumbled expectations, investors did manage to push the S&P 500 Index over the coveted 1,700 mark.

Looking ahead, below we outline three ETFs that could see an uptick in trading activity as investors react to the latest economic news and announcements this week [Download 7 Simple & Cheap ETF Model Portfolio]:

1. CurrencyShares Australian Dollar Trust (FXA, A-)

Why FXA Will Be In Focus: This currency ETF will come under the spotlight on Tuesday morning as investors react to the overnight Reserve Bank of Australia interest rate decision. Analysts are expecting for the rate to be lowered to 2.50% from 2.75% currently; often, the commentary issued after the rate decision itself offers more valuable insights into the economic outlook that can have an impact on markets [see The Ultimate Guide To Currency ETF Trading].

2. CurrencyShares Japanese Yen Trust (FXY, C+)

Why FXY Will Be In Focus: The Japanese yen will make its way onto the radar screen for many on Thursday morning as investors digest the latest monetary policy statement following the rate decision. While rates are unlikely to change this time around, the policy statement can inspire wild swings in the currency market that could lead to a gap in FXY at the opening bell [see How To Take Profits And Cut Losses When Trading ETFs].

3. IQ Canada Small Cap ETF (CNDA, C+)

Why CNDA Will Be In Focus: This small-cap ETF will come into focus on Friday morning after investors get a chance to digest the latest monthly Canada employment report. Analysts are expecting for the unemployment rate to remain unchanged at 7.1%, while the jobs figure is expected to grow by 6,000 compared to last month’s minor contraction. An upbeat surprise here can inspire a rally for CNDA and help it regain lost ground thus far on the year.

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Disclosure: No positions at time of writing.