Daily Economic Commentary: Canada

“But I won’t stop until those pips are mine… papa-paparity,” sang the Loonie yesterday as it tapped its six-month high against the dollar at 1.0012. USD/CAD found some support at its intraday low and bounced a little to end the day at 1.0048, giving the Loonie a 59-pip gain.

Thanks to a better-than-expected economic report, the com-doll was able to continue on its advances against the dollar. Boo yeah! Statistics Canada reported yesterday that house prices increased by 0.1% in August which might have been a pleasant surprise to some as analysts advised the market to brace for a 0.1% decline.

I have a feeling that if the trade balance report for August impresses traders later at 12:30 pm GMT, there’s a good chance that the Loonie will be able to strut its swagger even past parity! Take note that analysts are expecting to see that imports outpaced exports by 2.3 billion CAD during the month. May the pips be with ya!

And USD/CAD hits parity again! Fortunately, the Loonie’s was short-lived, as traders bought up USD/CAD quickly after seeing it go under the 1.0000 handle. The pair ended the U.S. trading session at 1.0049, just 11 pips lower from its Asian session opening price.

Apparently, the better-than-expected results on the Canadian trade balance was enough to whet traders’ appetite for the Loonie. The report showed that exports to the U.S. rose during September unexpectedly rose, which caused the country’s trade deficit for August to shrink to 1.3 billion CAD from 2.7 billion CAD July. In addition, the figure was lower than the 2.3 billion CAD deficit initially predicted.

No major data coming out from Canada today, but still do watch out for its manufacturing sales report. It is expected to print a 0.5% rise in sales for September, opposite the 0.9% decline seen the month before. If the number comes out off-target, we may see the Loonie move… I wouldn’t bet on any major moves though, as this report isn’t heavily monitored by traders.

The Loonie showed the market why it’s nicknamed after a flightless bird during Friday’s trading when it gave up 59 pips to the dollar. USD/CAD closed the week at 1.0105, ending the Loonie’s 6-week winning streak. Tsk, tsk.

Too bad for the com-doll, better-than-expected figures we saw weren’t enough to convince traders to show it some love. Statistics Canada reported that manufacturing sales for August grew by 2.0%, beating its 0.5% forecast and erasing the 1.1% decline it posted in July. There was also motor vehicle sales report for the same month which showed a softer decline at 4.8% than what the market was bracing for at 5.0%.

We’re in for a treat this week with a handful of high-caliber reports for the Loonie and we’ll kick start things tomorrow with the BOC’s interest rate announcement at 1:00 pm GMT. A lot of my buds in the FX hood are not keeping their hopes up for another hike given that consumer spending and employment have both declined since the last rate announcement.

Then on Wednesday the central bank will release its Monetary Policy report along with BOC Governor Mark Carney’s speech. For that, you may want to keep an ear out for hawkish mumbo-jumbo if you want to place your bets on the com-doll. We’ll then end week with the CPI reports for September and retail sales report for August on Friday.

Happy trading everyone!

Too bad the Loonie’s pips during yesterday’s trading weren’t as sweet as Canada’s maple syrup. USD/CAD traded higher yesterday, peaking at 1.0228 before it closed the day at 1.0141, with the Loonie sustaining a 20-pip loss.

It looks like the Loonie won’t be getting any love from traders until after the [BOC](http://http://www.babypips.com/forexpedia/BOC) interest rate decision which is due later at 1:00 pm GMT. After three consecutive hikes, most of my buds here in the FX hood are expecting to hear the BOC holler a pause. Some are even bracing for dovish remarks from BOC Governor [Mark Carney](http://http://www.babypips.com/forexpedia/Mark_Carney) given that both [employment](http://http://www.babypips.com/forexpedia/Net_Change_in_Employment_-_Canada) and [retail sales](http://http://www.babypips.com/forexpedia/Retail_Sales_-_Canada) have been lower since the last rate announcement. Uh oh...

Make sure you don’t miss the rate decision and note that Carney is also giving a press conference along with the release of the Monetary Policy report at 2:30 pm GMT. May the pips be with ya!

“[I]Mayday, mayday, mayday…Position 178 pips north of yesterday’s open price… The Loonie is sinking.[/I]” The bulls were distressed over the Loonie’s dive in the pip charts yesterday as Canada was hit by a combo of dollar strength and Loonie weakness. USD/CAD soared to an intraday high of 1.0374 before leveling off to its 1.0319 closing price.

With the dovishness of yesterday’s economic reports, who could blame the currency bears for snacking on the Loonie? Not only did the Bank of Canadadecide to keep its interest rates at 1.00% yesterday, it also lowered its 2010 growth forecast from 3.5% to 3.0%. Uh-oh, is the lack of growth in the US, Canada’s largest trading partner, weighing on the Canadian economy?

Maybe the BOC monetary policy report today at 2:30 pm GMT could tell us more about the BOC’s economic outlook.

The wholesale sales for August will also be released today at 12:30 pm GMT, and a figure higher than the expected 0.5% rise in sales could provide the Loonie some relief.

Keep your eyes glued to the tube yo!

After losing for three straight days, the Loonie bulls decided that they had enough of just sitting back and letting the bears trample all over them. USD/CAD fell to 1.0222 by the end of the U.S. trading session, 130 pips lower from its Asian session opening price. Was the upmove we saw the past three days simply a retracement of the overall downtrend? Hah, that’s what it seems like!

Apparently, risk appetite from positive corporate earnings and the overall sentiment that the Fed will engage in another round of quantitative easing were the primary culprits in USD/CAD’s decline. Traders turned their “risk” on and started dumping the Greenback in favor of higher-yielding currencies like the Loonie.

Canada’s wholesales report also helped. It revealed that sales grew 1.2% in August, more than double the 0.5% increase initially predicted and a huge improvement from the previous month’s flat reading.

Not everything was rainbows and sunshine though. The BOC monetary policy report that was released yesterday showed that the bank has lowered its growth forecast for the upcoming quarters as currency tensions and global trade imbalance continue to get worse. It also provided no hint of another rate hike, which could cap the Loonie’s rally.

For today, the data to keep an eye out for is Canada’s leading index at 12:30 pm GMT. A 0.2% reading is expected for September, which is slightly lower than August’s 0.5%. The leading index tries to predict the direction of Canada’s economy, so falling figures mean that growth in the country is expected to slow down. If the actual comes out higher, we may see the Loonie climb higher against the Greenback again.

“We’re going down, down, in an earlier round. And com-dolls we’re going down swingin’,” sang the Loonie as it joined its homies in the bear lair. It was able to drive USD/CAD to an intraday low of 1.0168 before it lost its ground to the dollar and ended the day with a 43-pip loss. Drats!

 So what caused the Loonie’s boo-boo on the charts? Naysayers point to the worse-than-expected leading index for September which tumbled to -0.1% when the market had been expecting the composite index based on ten economic indicators to cite a 0.2% growth rate for the month. 

  This might have upset a few Loonie bulls as the decline (which is the first one since April 2009) confirms talks that the [BOC](http://www.babypips.com/forexpedia/BOC)won’t give another rate hike shoutout this year. Yikes!

  If today’s economic reports disappoint the market, then we may just see the Loonie continue to chill with the bears for some time. At 12:00 pm GMT, we’ll have the official [inflation](http://www.babypips.com/forexpedia/Inflation) report for September. The headline [CPI](http://www.babypips.com/forexpedia/CPI) figure is anticipated to come in at 0.1% while the Core CPI is seen at 0.3%. Then at 1:30 pm GMT, analysts are expecting to see that [retail sales](http://www.babypips.com/forexpedia/Retail_Sales) declined by 0.1% in August. 

  May the pips be with y’all! Peace out!

The Loonie was wrestling for pips against the dollar last Friday with USD/CAD falling to an intraday low of 1.0224 right after tapping a high of 1.0303. Too bad for the com-doll, it didn’t have enough swagger left to end the day with a win as USD/CAD closed 6 pips higher at 1.0270. Drats!

  Better-than-expected consumer spending and [inflation](http://www.babypips.com/forexpedia/Inflation) reports might have helped the Loonie hustle against the dollar. Statistics Canada reported that [CPI](http://www.babypips.com/forexpedia/CPI) was at 0.2% in September which was 0.1% higher than what the market was anticipating. On the other hand, the core rate which excludes volatile items only printed at 0.2% and fell short of the 0.3% forecast. 

Retail salesalso came in as a pleasant surprise at 0.5% for August which beat the 0.1% decline that analysts were bracing for.

Some of our buds here in the FX hood say that the currency’s loss might have been because the BOC’s pessimism on the country’s economic outlook. Uh oh…

  Our awesome [economic calendar](http://www.babypips.com/tools/forex-calendar/) shows that we’re in for a snoozefest for the Loonie until Friday when the [GDP](http://www.babypips.com/forexpedia/Gross_Domestic_Product_%28GDP%29) report for August is released. Analysts are expecting to see that the economy expanded by 0.3% during the said month, erasing the 0.1% decline it posted in August.

  And so, it may be wise to get a feel of the market’s sentiment in trading the Loonie as the lack of economic reports may leave currency vulnerable to market’s mood swings. Good luck y’all!

Score another one for the comdoll connection! Like the other commodity-related currencies, the Loonie gained against the dollar after the dollar-bearish sentiments from the G20 meeting and Goldman Sachs estimates. USD/CAD dropped to an intraday low of 1.0155 before leveling off 53 pips lower than its open price at 1.0203.

The boards were empty yesterday, but Bank of Canada Governor Mark Carney will make things interesting at 7:30 pm GMT when he gives his speech before the Standing Committee on Finance in Ottawa.

Don’t even think of missing all the action!

The Loonie practically erased its gains against the Greenback from Monday as the American currency beefed up and pushed USD/CAD higher yesterday. The Loonie hardly put up a fight! The lack of reports from Canada allowed USD/CAD to finish at 1.0240, up 36 pips for the day.

Unfortunately, the Loonie couldn’t find support from commodities either. Moves in the commodities markets remained weak yesterday and couldn’t give bulls what they needed.

Uncertainty surrounding the U.S. FOMC statement next week seems to be taking its toll on the Loonie as well. Remember, the U.S. is Canada’s largest trading partner. Since the two are practically joined at the hip, what affects the U.S. usually has a great impact on Canada, too.

In other news, BOC Governor Mark Carney took center stage and spoke before the Finance Committee of the House of Commons. He sounded particularly concerned about Canada’s labor productivity, saying that it is woefully low. He also said that even though the economy has been faring better than most advanced countries, he’s expecting business investment to take over and fuel economic growth as consumer spending is expected to weaken in the coming years.

Today, we’ll hear more about what Carney has to say about the economy when he speaks at 8:15 pm GMT. This guy just loves the spotlight, doesn’t he?! Maybe he’ll give us something new to chew on and drop hints about future policy moves. Stay glued to the tube, brah!

Yeouch! The Loonie lost against its major counterparts yesterday despite the absence of economic reports in Canada. USD/CAD rose to an intraday high of 1.0340 before leveling off 47 pips higher than its open price at 1.0288. Meanwhile, CAD/JPY plunged to an intraday low of 78.94 before ending the day at 79.42.

Is it because investors agree with Bank of Canada Governor Mark Carney? In his speech before the Senate Committee on Banking, Trade and Commerce, Carney relayed his concerns over the economy’s exports. Apparently, weak demand from the U.S., its largest trading partner, and a strong Loonie are making exporters skittish over the Canadian economy. Uh-oh.

The boards are still empty in Canada today, but keep your eyes peeled for any reports that might influence comdoll trading!

“[I]I’m on a high, on a high, there’s nothing more to it…[/I]” Despite the lack of economic reports from the economy, the Loonie danced to Duncan Sheik’s number on greenback weakness. USD/CAD dropped by 70 pips from its open price at 1.0217 after hitting an intraday low of 1.0182.

Will the Loonie get more pip lovin’ today? The big GDP report is scheduled for release at 12:30 pm GMT. Market junkies expect the figure to climb by 0.3% in August after dropping by 0.1% last July, but a higher figure might ease the worries caused by the speeches made by Bank of Canada Governor Mark Carney early this week.

Data on raw materials purchased by manufacturers will also be out today at 12:30 pm GMT, and a figure higher than the expected 0.3% growth figure in September could push the Loonie further up the charts.

Lastly, the change in prices of goods sold by manufacturers will be on tap today at 12:30 pm GMT. Analysts peg the figure at a 0.5% growth in September, but a higher number could mean more demand for the companies’ goods.

At first, the Loonie looked as though it was going to edge lower down the charts last Friday. But midway into the London session, the release of reports from Canada and the U.S. re-energized the bulls and helped them claim victory for the day. USD/CAD entered the weekend at 1.0201 after hitting an intraday high of 1.0249.

Positive data from both sides of the border helped the Loonie get its groove back as respectable GDP figures from both countries helped reduce investor risk aversion. I guess investors began the Halloween weekend spook-free, eh?

On the Canadian side of the fence, the monthly GDP data came in just as expected. Analysts were right on the money when they predicted a 0.3% uptick in August to follow the 0.1% downtick in July.

The details of the report said that manufacturing, wholesale trade, and oil and gas extraction were the main drivers of growth in August. Again we see the importance of oil to Canada’s economy. It seems that all those road trips are finally paying off, huh?

If you recall, the Bank of Canada said earlier in October that it would carefully consider any further rate hikes. If the economy continues to show growth like this, the bulls may well find themselves on the receiving end of a rate hike. But we may have to take a chill pill in the meantime. The future is still very cloudy and the economy’s rebound isn’t certain yet, as the central bank is still very concerned about the patchy global recovery.

You’ll have to wait until Thursday for your first taste of high-impact data if you’re looking to trade news from Canada this week.

At 2:00 pm GMT on Thursday, the latest Ivey PMI numbers will be available. We saw a reading of 70.3 in September, but many say we will see this figure soften to 66.3 in October. As this report is often treated as a leading indicator of economic health, look for markets to react if the actual results don’t match forecasts.

To cap the week off on Friday, we will receive October’s employment data at 11:00 am GMT. While the unemployment rate is expected to hold steady at 8.0%, we’re told that we’ll probably see a net increase of 10,000 in employment. After seeing a decrease of 6,500 in September, an uptick in this department would come as a breath of fresh air.

Yes, the dollar rose across the board… except against the Canadian dollar that is! USD/CAD managed to scrape its way 36 pips lower to close at 1.0153. How did the Loonie bears manage that?

With no data coming out from Canada, it was somewhat surprising to see the Loonie take some pips away from the dollar bulls. If you ask me, it probably had something to do with oil trading, which remains resilient. Crude oil is now at 83.50 USD a barrel, and some suggest that it may make a run for the 90.00 mark.

Once again, not data coming out from Canada today, and with the U.S. in the middle of mid-term elections, we may see more range like behavior during the U.S. session. Then again, someone may something pretty drastic and move the whole markets, so always, be on your toes!

Despite the lack of economic data from Canada, the Loonie was still able to remain well-bought yesterday and rally against the Greenback. USD/CAD ended the day at 1.0091, almost 70 pips lower from its Asian session price.

What do you think brought about the Loonie’s rally? Hah, risk appetite of course! Apparently, the unexpected 0.25% rate hike from the Reserve Bank of Australia during the Asian session triggered a wide-reaching case of risk taking in the markets, which helped currencies like the Loonie strengthen.

Canada’s data cupboard is barren again today, but we’ll be seeing some very important reports from its next door neighbor, the U.S. The upcoming reports – the ADP non-farm change, the ISM non-manufacturing survey, and the FOMC statement – can create a lot of wild volatility swings, so don’t trade them unless you know what you’re doing!

The Loonie isn’t one to get left out. It joined yesterday’s winners club, too! Though its gains were a lot more modest compare to others’, it also rose against the Greenback. USD/CAD closed 29 pips lower at 1.0053, but only after spiking up to 1.0157 when the FOMC made its much-awaited statement.

The Loonie’s advance was probably limited because of Canada’s strong ties with the U.S. As you know by now, the U.S. is its largest trading partner, and so trouble in the U.S. can easily cross the border and affect Canada as well.

Up ahead, we have the Ivey PMI on tap. If you recall last month, the index printed a solid rise from 65.9 to 70.3 for the month of September, suggesting that the economy is chugging along just fine. This time around, a more modest reading of 65 is expected. Though it’s a downgrade from September’s awesome results, it’s still quite encouraging as it is well beyond the reading of 50.0, which indicates expansion. Put on your trading hats and catch it at 2:00 pm GMT!

Just like the bird it was named after, the Loonie flew to the skies yesterday! Shrugging off a weaker-than-expected Ivey PMI report, USD/CAD fell from an intraday high of 1.0122 and settled about 30 pips lower for the day at 1.0023.

We saw another Loonie rally yesterday thanks to the Fed’s bond-buying program. But its gains were probably cut short for a couple of reasons.

First, Canadian purchasing activity declined much sharper than expected according to the latest Ivey PMI report. A reading of 65.0 was expected to follow September’s 70.3. Instead, October decided it would pull a fast one on the markets and dropped to 56.7! This wasn’t the kind of surprise many were hoping to see.

Second, Canada rejected Australia’s BHP Billiton’s bid to take over its Potash Corp. The takeover could have helped extend the Loonie’s gains as it would naturally require a lot of Loonie buying to execute the transaction.

We’ve got a few more hard-hitters coming our way today.

At 11:00 am, Canada’s October employment statistics will be available. Forecasts are for a net increase in employment of 15,000 to follow the previous month’s net decrease of 6,600. According to analysts, this probably won’t cause a shift in the unemployment rate as it is predicted to hold steady at 8.0%.

Then at 12:30 pm GMT, we see the change in total value of new building projects authorized for construction in September. The building permits report is anticipated to print a modest 2.8% rebound from the previous month, which sadly posted a 9.2% decline.

You know the drill! Be on the lookout for better-than-expected figures if you’re looking to get bullish today.

Last but not least, BOC Governor Carney is due to speak at the International Security Forum today. As usual, listen closely to what the head of the central bank has to say because he could give us clues about future policy decisions. Catch him at 7:00 pm GMT!

“Greenback’s got nothing on you Loonie,” sang traders as USD/CAD ended Friday 20 pips lower at 1.0002 despite the mixed employment figures from Canada. At the end of the week, the com-doll bagged a total of 187 pips against its counterparts. Boo yeah!

Statistics Canada reported that net change in employment only rose by a puny 3,000 in October, falling short of the 15,000 consensus. Wait! Before you go into a panic attack, know that the report isn’t as bad as the headline figure suggests.

Digging a little deeper we see that it was part time employment that took a toll on the report when it fell by 44,200 during the month. On the brighter side of things, there was a total of 47,200 people that were hired as full-time workers. See, that ain’t so bad, right?

Making things even better was the unemployment rate that tapped in at 7.9% in September which was 0.1% lower than the consensus and the previous reading.

For today we’ll have the housing starts report for October due later at 1:15 pm GMT. But hopes aren’t high for the report with the forecast down to 181,000 from 186,400 in September.

Then tomorrow we’ll get more dibs on the housing market with the house price index for September at 1:30 pm GMT. The market is eyeing a 0.5% increase in house prices during the month to follow the 0.1% growth in August.

Be on your toes also for BOC Governor Mark Carney’s speech tomorrow at 5:15 pm GMT. You may want to brace yourselves for dovish comments as the BOC has become more concerned about its outlook for the economy. Word on the street is that Carney even warned of a possible intervention at the wake of “extreme movements” in the currency market. Yikes!

That’s all I have for y’all today. Happy trading!

Is the Loonie gonna start flying south for the winter? Yesterday’s price action on USD/CAD seems to suggest it. The pair failed to cross parity yesterday and, instead, climbed higher to hit 1.0038 after opening at 1.0009.

Aside from USD strength, USD/CAD was lifted up by a disappointing Canadian housing starts report. The seasonally adjusted annual rate of housing starts was expected to soften from 185,000 to 181,000, but instead, October printed much worse at 167,900. Analysts were able to pinpoint the cause of the decline and named the drop in urban single starts in all regions save for Atlantic Canada as the culprit.

Up ahead, we have the September house price index. The index is expected to print higher for the and is anticipated to show a 0.3% uptick following the 0.1% rise of the previous month. Will the worse-than-expected housing starts report also translate to a worse-than-expected housing price index? Tune in at 1:30 pm GMT to find out!

Then at 5:30pm GMT, BOC Governor Carney takes the microphone and spits out sick rhymes about “Canada and Global Financial Reform.” Don’t miss what he has to say because he may just decide to speak about what the central bank may do in the future.

Southbound for the winter it is! The Loonie continued its move down yesterday as the Greenback strengthened against the comdolls once again. After retesting parity and dropping down to .9980, USD/CAD rose and managed to close 37 pips higher for the day at 1.0074.

Economic data released yesterday did little to prevent the Loonie from sliding further. The house price index printed below expectations by showing a 0.2% increase instead of 0.3% in September. Still, this marks a modest improvement from the previous month’s growth of 0.1%.

Now onto BOC Governor Mark Carney’s little speech! Yesterday, the big man came out to say that the Loonie’s current position is reflective of Canada’s economic fundamentals. Could this be his way of agreeing with the Loonie’s rise to parity?

He also added that high household debt, together with a weak U.S. export market, may result in a more modest growth for Canada. With words like that, it doesn’t sound like we’ll be getting any rate hikes soon.

On tap for today is Canada’s trade balance report. The month of September is anticipated to exhibit a widening of the 1.3 billion CAD deficit to 1.4 billion CAD. Given the disappointing Ivey PMI numbers we’ve been seeing lately, a wider deficit certainly wouldn’t be all too surprising. Catch the report at 8:30 am GMT!