The highly overbought Loonie found itself giving up some of its gains in yesterday’s trading session. Although the USDCAD was sold early on in Asia, the pair was able to bounce back once the US trading session rolled along to end the day at 0.9992.
The losses the Loonie experienced during the US session was mostly caused by worse-than-expected results on the wholesales sales report. It showed that wholesales sales fell 1.2% in February, opposite the 1.0% gain initially predict. In addition, January’s 3.0% gain was revised down to 2.4%.
For today, a couple of red flags could be found in Canada’s economic calendar.
First, at 12:30 pm GMT, is Canada’s leading index for the month of March. It is expected to print a 0.8% reading, which is exactly the same as the reading seen in February. The index, which is made up of ten economic indicators (some previously released), is designed to see whether Canada’s economy is improving or not.
Second, at 2:30 pm GMT, is the Bank of Canada’s quarterly monetary policy report. The report basically contains the bank’s detailed assessment of Canada’s current and future economic conditions. Currency traders use the report as a way to predict possible rate hikes (or cuts).
Lastly, at 3:15 pm GMT, the BOC will hold a press conference to answer questions regarding its monetary policy report. This will probably garner the most attention from traders, so expect a bit of volatility during that time. Another round of hawkish statements from the BOC could send the Loonie flying high…