We’re going down down in an earlier round, but sugar, we AIN’T goin’ down swingin’! The Loonie hardly put up a fight against the Greenback yesterday. Then again, after seeing Canada’s horrendous economic data, could we really blame it? USDCAD made a 103-pip leap up the charts to close at 1.0391 at the end of the day.
Although risk aversion wiped out most of the other currencies, the Loonie took a particularly strong hit because of poor economic data.
First off, the leading index for the month of July printed much worse than expected as it gave a reading of 0.4%, almost half of what was forecasted. In fact, results were so bad, analysts decided to downgrade the previous month’s reading from 1.0% to just 0.7%! This report is usually used to gauge the overall trend in the economy. Obviously, things aren’t looking so well in Canada.
At the same time, Canada’s wholesale sales did the exact opposite of what was expected. Forecasts were for a 0.4% uptick, but instead, the month of June decided to go the other direction and record a 0.3% downtick! Could this be another sign of an economic slowdown?
Let’s see if today holds more bad news for the Loonie. At 11:00 am GMT, Canada is set to unveil its CPI figures. Will July print an upside surprise and boost the Loonie by exceeding expectations of a 0.1% increase in prices following June’s 0.1% decline? Or will it send USDCAD higher up the charts by printing below forecasts? Stay tuned, folks!