Daily Economic Commentary: Canada

[PipDiddy]

Way to go, Loonie! Thanks to renewed risk appetite, the Canadian dollar pocketed huge gains against the Greenback yesterday. USD/CAD opened at 1.0099, reached a high of 1.0148, then ended the day at 1.0036.

Even though Canada didn't release any economic data yesterday, the Loonie was able to take advantage of the risk rallies which boosted commodity prices and the comdolls. Aside from that, the Loonie was also able to cash in on the dollar selloff that followed the FOMC statement. Apparently, the Fed plans to keep rates at their current levels until 2014. That's a couple more years' worth of low U.S. interest rates!

For today, Canada's economic calendar is still empty, which means that the Loonie will have to take its cue from risk sentiment again. Be mindful that the U.S. has more than a few red flags on deck so make sure you also check out my U.S. economic commentary before trading USD/CAD!

[PipDiddy]

And parity holds for USD/CAD! But for how long? The Loonie made a strong rally yesterday but quickly reversed during the U.S. session when euro zone debt concerns resurfaced. Still, the Loonie was able to save some of its gains as USD/CAD closed 19 pips down from its 1.0036 open price.

Although Canada didn't release any economic figures yesterday, the Loonie was still able to join the risk rally that took place during the first few hours of the London session. However, risk aversion popped its head back in the markets later on when market participants found out that the ECB still couldn't reach a deal with Greece's creditors.

There aren't any economic reports on Canada's schedule for today so make sure you keep close tabs on risk sentiment to figure out where USD/CAD could be headed. Bear in mind that the U.S. is set to release its advanced GDP figure at 1:30 pm GMT today, and that could be a huge market mover. Stay on your toes!

[PipDiddy]

Parity holds AGAIN! Though the Loonie gained 9 pips against its American counterpart, it was unable to push USD/CAD below parity as the pair greeted the weekend at 1.0008. Will Loonie bulls attack 1.0000 again today?

Risk appetite gave the Loonie and its comdoll brethren one final boost before the weekend, but it looks like the effects are starting to wear off. The comdolls are off to a weak start this week! Is risk sentiment starting to shift against risk takers, or is this an opportunity to load up on long comdoll positions?

That's certainly something to think about while we wait for Canadian data to come out tomorrow at 1:30 pm GMT. The monthly GDP report is due and slated to show a 0.2% uptick for November following October's 0.0% growth.

Then on Friday, Canadian employment data will be available. Look for the unemployment rate to remain steady at 7.5% and expect this to be accompanied by a growth of 23,500 jobs in January.

In the meantime, keep your eyes on risk sentiment and commodities markets if you plan on trading the Loonie! Peace out and good luck, homies!

[PipDiddy]

With the dollar off to a quick start, the Loonie saw itself trading lower to begin the week. USD/CAD hit a high at 1.0071 before eventually stabilizing at 1.0028, just 18 pips above its opening price for the week. Will the bears eventually take over and push USD/CAD back below parity?

No biggies released from the Great White North yesterday, but make sure you tune in today at 1:30 pm GMT, as monthly GDP figures will be hitting the markets. Word is that the Canadian economy grew by 0.2% in November, which would be a nice improvement from the flat growth we saw in October. If we see the report print higher-than-anticipated, it may just give the Canadian dollar the fuel it needs to break past the key 1.0000 mark.

[PipDiddy]

No thanks to Canada’s disappointing GDP figures and the slight case of risk aversion in the market, the Loonie was unable to make significant gains yesterday. Against the Greenback, for instance, the Loonie ended the day at 1.0027, which was just a 1 pip difference from its opening price.

The GDP report for the month of November showed a 0.1% contraction, opposite the 0.2% growth initially expected. It was also worse than the month prior’s flat reading. According to the data, the decrease was primarily the result of the fall in mining, oil, and gas extraction.

The unexpected drop hints that the slowdown in the fourth quarter of 2011 was much sluggish than forecast, and could lead to the annualized rate being cut to 1.5% from 3.5% during the quarter before.

No major report coming out of Canada today, so pay attention to the ADP non-farm employment change from the U.S. to determine where the Loonie is headed. The report will come out at 1:15 pm GMT, and is anticipated to show a 189,000 gain.

[PipDiddy]

And just like that, USD/CAD is now officially on the other side of parity! USD/CAD closed at .9991, as the Loonie closed 36 pips lower on the day. Is the pair destined for new lows?

Just like other higher yielding currencies, the Canadian dollar took advantage of U.S. dollar weakness and crept higher. Interestingly though, crude oil has now dropped the past four trading days. I’m curious to see whether the Canadian dollar will remain resilient or if it’ll eventually follow oil’s lead.

No data on tap today, but be on the lookout for any surprises in the market. You never know what might move the markets!

[PipDiddy]

Talk about a neck-and-neck fight! Bulls and bears played tug-o-pips on USD/CAD yesterday, with the pair just seesawing around its opening price of .9991. However, it was the dollar who came out on top by the end of the day's trading as USD/CAD closed at .9996. Sorry Loonie!

The lack of economic reports might have limited the comdoll's moves. With our forex calendar still blank for reports from Canada today, you may want to keep tabs on market sentiment. Keep in mind that the currency usually rallies when risk appetite is up.

On top of that, be sure to keep an eye out for the much anticipated NFP report from the U.S. Forex Gump wrote a blog that will help us anticipate the report better, so it might be a good idea to check it out.

[PipDiddy]

Never mind poor economic data – risk appetite is here to stay! Thanks to a strong NFP report, USD/CAD blasted below its .9950 support and ended the day with a 60-pip drop at .9936. Boo yah!

Last Friday Canada printed weak employment reports as its unemployment rate surprisingly rose to 7.6% in January. In addition, its employment change report revealed only an addition of 2,300 in the month instead of the 23,300 figure that many were expecting. Good thing the positive NFP report from the U.S. saved the day for high-yielding comdolls!

Will Canada continue to print disappointing reports this week? The week will kick off with the IVEY PMI report at 3:00 pm GMT, followed by the building permits data tomorrow at 1:30 pm GMT; the housing starts data on Wednesday at 1:15 pm GMT, and the trade balance report on Friday at 1:30 pm GMT.

Peace out, homies! Go forth and make some pips!

[PipDiddy]

Cheer up, Loonie bulls! Yesterday was just one of those days when you still lose despite positive data. The Loonie ended Monday's trading with a 3-pip loss against the dollar as USD/CAD closed higher at .9955.

The Ivey PMI for January topped both the 58.6 forecast and the 63.5 reading for December. Although this implies that the manufacturing industry grew at a faster pace during the month, traders seemed to have been pre-occupied worrying about Greece still not reaching a deal with its creditors.

Given that, you may want to gauge market sentiment in today's trading. I have a good feeling that updates from the euro zone will primarily dictate investors' moods. Also be sure to be on your toes for December's building permits report from Canada due later at 1:30 pm GMT. If the tier-1 report prints higher than 0.2%, we may just see the Loonie rally!

[PipDiddy]

Who paid attention to the Loonie yesterday? Nobody, apparently, as USD/CAD hardly exhibited any volatility. It simply moved sideways the entire day and ended the U.S. trading session at .9949, a mere 6 pips lower from its opening price.

Even though the report on building permits came in greatly above forecast, it failed to make an impact on the Loonie’s price action. The report revealed an 11.1% gain, significantly higher than the 0.2% increase initially expected. It was also a very welcome improvement from the previous month’s 0.2% decline.

Today, only the housing starts report is on Canada’s economic cupboard. It is slated to show that 193,000 homes (annualized) began construction in January. Rising housing starts are usually considered good for the currency, as it reflects the health of the economy. A better-than-expected figure could provide support for the Loonie.