September 17, 2012
This is why you don’t count your chickens before they hatch! The Canadian dollar looked like it was gonna continue dominate the dollar, as USD/CAD set a new low at .9633 last Friday. However, the Canadian dollar lost all momentum, as the dollar came roaring back during the New York session. By the end of the day, USD/CAD closed at .9706, up 23 pips from its opening price.
One reason why the Canadian dollar may have lost a step was due to worse-than-expected manufacturing sales figures. A report released last Friday indicated that sales dropped by 1.5% last July, after it was expected to increase by 0.4%. Furthermore, June’s sales were revised lower to reflect a decrease of 0.8%, after initial reports printed flat growth.
With these new figures, manufacturing sales have now dropped three consecutive months! So much for the summer boom!
For today, all we’ve got lined up is foreign securities purchases figures at 12:30 pm GMT. This report measures the net amount of Canadian financial assets purchased by foreigners. Early forecasts are saying that 11.3 billion CAD worth of assets were bought last July, which would be a nice turnaround from the -7.89 billion CAD we saw the month before. This would indicate that demand for Canadian assets has picked up, which should bode well for the Canadian dollar.
"The only cable I watch is the pound baby."