October 23, 2012
Are those muscles I see? Why, yes they are! For the first time in three days, the Loonie was able to advance versus the safe haven Greenback. USD/CAD had begun the day at .9946 but eventually fell and traded at .9922 by the end of the U.S. trading session.
No major data was released yesterday, so the Loonie’s move was probably the effect of investors taking profit on the recent move up of USD/CAD.
Today, there are a couple of tier 1 events lined up, namely the retail sales report and the BOC’s interest rate decision.
The Canadian retail sales report, which will be published at 12:30 pm GMT, is expected to show a 0.3% rise for the month of August. In July, the retail sales report printed a 0.7% increase. The core version of the report is projected to also show a 0.3% climb, down from the previous month’s 0.4% jump.
As for the BOC’s interest rate decision, it is widely expected that the central bank will keep rates unchanged at 1.00%. According to analysts, however, the accompanying statement could be bearish for the Loonie as the central bank could talk down interest rate hike expectations. If BOC Governor Mark Carney sounds dovish and continues to carry out a wait-and-see approach into 2013, we could see the Loonie sell-off again.
"The only cable I watch is the pound baby."