Daily Economic Commentary: Canada

[PipDiddy]

What an up and down day for the Loonie! After sprinting to as low as 1.0210 midway through the London session, the pair reversed course and made its way back up to the 1.0300 handle. By the end of the day, the pair was trading at 1.0260, marking a 40-pip loss on the day.

One set of data that boosted the Canadian dollar early were retail sales figures that were released in the New York session. Headline sales growth was at 1.0% in November, while core retail sales were up by 0.7%. These figures were much better than the expected 0.3% and 0.4% that experts were predicting. I guess the Thanksgiving shopping spirit spilled over on to the Great White North!

Nothing coming out today from Canada, so we may see less movement on the Loonie. In any case, just be careful out there as you never know when we’ll see an exaggerated move for no reason other than that liquidity is pretty thin right now. Good luck!

[PipDiddy]

It looks like Loonie bulls will indeed have a merry Christmas this year. That is, if risk appetite lingers! Yesterday, the Loonie closed with a 49-pip win against the dollar at 1.0211 thanks to the positive vibes brought about by better-than-expected U.S. data.

With that said, it would probably be a good idea to keep tabs on the reports we have on tap from the U.S. as well as the GDP report coming from Canada. The consensus is for the economy to have grown by 0.1% in October. A better-than-expected figure will probably send USD/CAD even lower on the charts so watch out!

[PipDiddy]

Though risk aversion threatened the Loonie in the last days of the year, the comdoll was pretty much able to maintain its footing against the Greenback. USD/CAD consolidated after experiencing wild swings, eventually ending the year just below the 1.0200 handle.

If you want a quick recap of the rollercoaster ride that the Loonie went through in 2011, I suggest you take a look at Forex Gump's year-end review of the Loonie's price action. It's a sweet read and checking it out would be a wise way to spend your time considering that many markets will still be closed today!

The week ahead looks promising, as Canada will be rolling out some hard-hitting reports to start the year. On Thursday, we have the Ivey PMI coming out. The index is expected to slip from 59.9 to 56.7.

Then on Friday, we'll take a look at Canadian employment data. According to economic fortunetellers, the unemployment rate probably remained 7.4% last month. However, expect December to show an increase of 15,300 jobs, a nice reversal to the 18,600 jobs that were lost in November. Good luck and may you all have an awesome 2012!

[PipDiddy]

All throughout yesterday's trading, USD/CAD was just chillin' like a villain at the 1.0200 handle due to the absence of economic data. Luckily, the Loonie was able to hustle some muscle before the day's close, ending it with a 17-pip win at 1.0194.

Our forex calendar is still blank for reports from Canada today. However, that doesn't necessarily mean that we won't see any action on USD/CAD. As Forex Gump pointed out in his blog yesterday, we may see volume pick up and affect the fate of currencies on the charts as traders go back to their desks after the holidays. So be careful!

[PipDiddy]

Guess who's 2-0 for 2012! That's right, the Loonie! For the the second straight day, the Canadian currency posted gains against its American counterpart as a round of risk taking boosted the comdoll. This saw USD/CAD post its biggest daily slide since November of last year as it fell from 1.0194 to 1.0110.

Risk appetite was about as healthy as ever yesterday. A downpour of positive reports from around the world caused it to rain pips across several markets. With upbeat data from the euro zone and the U.S. fueling demand, the comdolls were able to extend their rallies for another day!

Today, it looks like we won't be getting any Canadian reports again, so in the meantime, I suggest you keep tabs on risk sentiment. After yesterday's surprising risk rally, it'll be interesting to see if the Loonie can hold onto its gains. Stay sharp, fellas! Let's see if this bullish momentum will carry the Loonie higher!

[PipDiddy]

With risk-taking taking a backseat yesterday, the Canadian dollar reversed some of its gains made early in the week. USD/CAD traded as high as 1.0163 before settling at 1.0123, marking just a 13-pip gain on the day.

The Loonie rose on overall risk aversion yesterday, as higher yielding currencies faltered a bit. Interestingly, the losses were much smaller on the comdolls as compared to the euro, indicating that fundamentally, the Canadian dollar might be a bit stronger than some of its other counterparts.

Later today at 3:00 pm GMT, the Ivey PMI is scheduled to hit the airwaves. Expectations are that the index will print at just 57.5, down from the 59.9 reading we saw last month. Should this report come in much worse-than-expected, it could lead to another round of losses for the Canadian dollar.

[PipDiddy]

All was not good in the Loonie's hood yesterday as it ended up erasing what was left of its big gains from Tuesday. With risk appetite turning sour, USD/CAD was forced to close at 1.0192, 69 pips above its opening price.

Traders paid little attention to yesterday's Ivey PMI report as they ditched the Loonie although the index printed upbeat results. Analysts had initially predicted the index to fall from 59.9 to 57.5, but instead, it surprisingly rose to 63.5! But this did little to improve demand for the Loonie as traders were in hardcore risk aversion mode yesterday.

Today we have more data coming out at 12:00 pm GMT in the form of employment reports. The Canadian unemployment rate is expected to chill at 7.4%. However, survey says that we'll likely see an increase of 17,800 jobs for the month of December, a nice reversal to the 18,600 jobs lost in November.

As big as these reports are, you have to keep in mind that within two hours of their release, the U.S. will be publishing employment data of its own. Y'all better factor in the U.S. NFP report when you trade, folks! You don't wanna get blindsided, do ya?!

[PipDiddy]

I guess people aren’t that looney for the Loonie eh? The Canadian dollar was one of the biggest losers last Friday, as poor economic data sent it much lower. USD/CAD rose 88 pips from its opening price to finish at 1.0270. Can the Candian dollar make a comeback, or will it take more hits this week?

One reason why the Canadian dollar may have took some hits last Friday may have been due to some employment figures. While 17,500 jobs were added to the economy, the unemployment rate ticked up to 7.5%. Moreover, Canadian businesses remain cautious, we may mean only modest jobs gains in the coming months.

Later today at 1:30 pm GMT, building permits figures will be made available. Expectations are that building permits dropped by 3.1% in November, after they rose by 11.9% in October. Remember, obtaining a building permit is the first step in the construction of a new building. Falling permits would indicate that construction activity may tick down, which wouldn’t bode well for the construction industry.

[PipDiddy]

After tapping a low of 1.0320 against the dollar, the Loonie hustled its muscles to a rally and ended the day with a 51-pip win at 1.0229. Now that’s how you start the week right!

Luckily for the Loonie, market sentiment improved following positive developments in the euro zone and allowed traders to somehow overlook the worse-than-expected building permits report for November. The total value of new building permits issued dropped by 3.6% during the month after growing by 11.6% in October. It also disappointed expectations as markets only priced in a decline of 3.1%.

With that said, be sure you keep tabs on market sentiment in today’s trading to help you gauge the Loonie’s fate on the charts. The Chinese trade balance report is due sometime today and it could affect the moods of investors. Remember that an 8.3 billion trade surplus is anticipated. Good luck!

[PipDiddy]

Like the rest of Happy Pip’s comdolls, the Loonie chalked up another win against the Greenback yesterday. USD/CAD dropped by another 60 pips after reaching an intraday low of 1.0154, ending the day at 1.0169.

As it turned out, the lack of bad news from the closely-watched euro zone as well as positive earnings report from the U.S. supported risk appetite. Not only that, Canada also released a better-than-expected housing starts report.

The data printed at 200,000 in in December, a 7.9% improvement from the 186,000 figure we saw in November. Heck, even Canada’s Finance Minister Flaherty is feeling the love for the Loonie! In his speech yesterday, he announced that while the government is planning on pursuing employment and economic growth, they’re also not planning on implementing austerity measures anytime soon. How’s that for good vibes, eh?

No economic report is scheduled for release in Canada today, but make sure you keep close tabs in your economic calendar to see if there are any news events that could move your favorite Loonie pairs!

Good luck in your trades, kids!