The lack of economic flows pretty kept the Loonie moving within a tight range yesterday. The USDCAD ended the US trading session at 1.0217, just a mere 25 pips lower from its Asian session opening price.
Canada will be releasing a couple of important economic reports today so the Loonie could prove to be a little bit more volatile than yesterday. Specifically, at 8:30 am GMT today, Canada’s new housing price index(NHPI) and trade balance are scheduled for release.
The new housing price index, which measures the monthly average change in selling price of new houses, is predicted to show a 0.3% rise March-on-February, better than the 0.1% increase seen period before. Rising house prices are typically seen as positive for the domestic currency, because it attracts businesses to invest in the housing industry.
Meanwhile, the country’s trade balance, which measures the net difference in value between imported and exported goods, is expected to show a 1.6 billion CAD surplus for the month of March. This means that analysts believe that more goods were exported than imported, and that demand for Canada’s exports picked up.
If the actual results of the reports later were to come in higher-than-expected later, expect to see the USDCAD to be sold off, as it would once again highlight Canada’s much better economic standing than the US.
Another quiet day for Loonie trading, as the USDCAD traded within a range of just 80 pips. The pair eventually closed just below the 1.0200 handle, down 20 pips for the day.
The new housing price index came in to meet expectations, indicating that housing prices rose by 0.3% from February to March. This is yet another positive sign for the Canadian economy, as improvements in the housing industry generally lead to more business activity.
Meanwhile, trade balance figures were quite disappointing, as a surplus of 300 million CAD was posted in March. Apparently, exports were hurt by a dip in energy prices. Still, some experts don’t believe that this may be just a one-month anomaly, and expect larger surpluses to be posted in the following months.
Looks like we’ve got nothing scheduled on the economic calendar for today, so it may be another day to sit back, relax, and watch the NHL playoffs… Gotcha! Who I am kidding! This is the currency markets I’m talking about, where sentiment can shift on a dime! Better stay on your toes and keep your risk management rules in check as you never know what may hit the markets!
After starting off on the wrong foot during the Asian session, the Loonie fought back and struggled to erase some of its earlier losses. At the end of the scuffle, it closed at 1.0147 against the greenback.
Canada didn’t release any economic reports yesterday, leaving the Loonie vulnerable when risk aversion came back into play. Today, Canada’s manufacturing sales report is due 12:30 pm GMT. The report is projected to show that manufacturing sales surged by 1.1% in March, following a measly 0.1% uptick in February. Stronger than expected results could give the Loonie enough energy to push for more gains.
Also, keep an eye out for the release of top-tier reports from the US, namely their retail sales, industrial production, and consumer sentiment data.
Like all the other commodity-based currencies, the Loonie bowed down to the strength of the dollar last Friday. The USDCAD, which opened Asia at 1.0204 that day, surged up to close the US trading session at 1.0317.
There are two important pieces of data to keep an eye for this week, both of which will be released on Friday.
The first one is Canada’s consumer price index at 1:00 pm GMT. It is expected to show a 0.3% uptick in consumer prices April, which would be an improvement from March’s flat reading. Rising CPI is usually seen as bullish for the domestic currency, because it could lead the central bank to control inflation by hike interest rates in the future.
The second one is Canada’s retail sales report. The report, which measures the monthly average change in retail sales, is predicted to show a rise of 0.2%. Meanwhile, the core version of the report that excludes automobile sales in its computation is anticipated to show a 0.5% climb.
The USDCAD surged higher early in yesterday’s Asian session, as more euro selling helped pushed the dollar higher. Luckily for all those CAD bulls, risk appetite improved throughout the day, which allowed to the USDCAD to finish lower at 1.0337.
CAD buying got a nice boost as risk appetite got nice boost on news that the ECB purchased 16.5 billion EUR worth of bonds last week. This was seen as a sign that the ECB is being more proactive in nipping Greek debt issues on the bud. As you can see, everyone is focusing on news across the Atlantic. As concerns grow regarding the euro zone’s stability, risk aversion has been rearing its head back into the markets, which has had a negative impact not only on European currencies, but on com-dolls like the CAD and AUD. Make sure you keep an ear open for any news coming out of Europe, as it will probably remain as a major market mover in the coming weeks.
Tonight at 8:30 pm GMT, international securities transaction data is due. This data measures the amount of Canadian securities that were purchased by foreigners in the report month. Word is that foreigners bought 6.42 billion CAD worth of Canadian stocks and bonds in March. Still, I wouldn’t be surprised if this figure comes out a little bit higher, considering how bullish traders have been on the CAD as of late.
The Loonie lost to the greenback in another round of risk aversion yesterday when ongoing problems in the euro zone sparked a flight to safety. This caused the USDCAD to climb from the 1.0250 area and close at 1.0338.
A weaker than expected foreign securities purchases report also weighed the Loonie down yesterday. Instead of landing at 6.42 billion CAD in March, net purchases of Canadian securities turned out negative during the month. The actual figure slid sharply from 6.74 billion CAD in February to -0.62 billion CAD, indicating that foreigners dumped most of their Canadian assets then. At the same time, Canadians began to load up on US securities in March, leading to a net outflow of funds from the Canadian markets.
Today, Canada is set to release its wholesale sales report at 12:30 pm GMT. After seeing a 1.2% decline in February, wholesale sales could post a 0.3% uptick for March. Being a leading indicator of consumer spending, a better than expected figure could allow the Loonie to bounce back from its poor performance yesterday.
Two hundred and thirty pips – that’s how much ground the CAD gave up against the USD yesterday. The combination of risk aversion, the weakening of the AUD, debt contagion fears, and the speculation of the BOC delaying its rate hike gave the CAD bears more fuel to take the currency lower across the board.
Even strong data from Canada’s leading index was unable to halt the CAD’s sell-off! In any case, there are two red flags on Canada’s economic calendar today.
The first one, which is the consumer price index, comes out at 11:00 am GMT. It is expected to show a 0.2% increase in April, opposite the flat reading from the month before.
The second one comes in the form of the retail sales report. It is predicted to show that the pace of growth in retail sales slowed down to 0.2% in March from 0.5% seen the previous month. The core version of the report covering the same period, on the other hand, is anticipated to reveal a rise of 0.5% from -0.1%.
Could the positive expectations on the report help the CAD regain some of its losses? Also, with the USDCAD finding resistance at the 1.0700-1.0750 region, could we see a retracement today? Remember, it is a Friday and traders eventually need to take profit sooner or later! We’ll all just have to wait and see…
Whoops! The USDCAD encountered a roadblock around the 1.0730 area and was forced to reverse its course from there. As the Loonie tried to erase its recent losses against the greenback, the USDCAD moved back to a low of 1.0552.
Strong economic data from Canada gave the Loonie enough strength to fight back against the greenback last Friday. Canadian retail sales surged by 2.1% in March, outpacing the forecast of a mere 0.2% increase. This was also higher than the 0.8% growth seen last February and marked its largest monthly increase in five years. Meanwhile, core retail sales saw a 1.7% rise for the month. Hooray for Canada!
Canada’s CPI also chalked up a better than expected figure for April, posting a 0.3% rise in price levels. The core version of the report, which excludes prices of volatile items in the calculation, also printed a 0.3% increase. This should give the BOC enough reason to push through with their rate hike by the middle of the year.
Not much economic reports are due from Canada this week. Only the current account balance is set for release… and that’s not until the last day of the week! Stay on your toes for possible swings in risk sentiment, which could dictate the direction of the Loonie this week.
Since most European and Canadian traders were out on holiday, the Loonie found itself trading in a choppy manner all throughout yesterday. The USDCAD ended the US trading session at 1.0602, just ten pips higher from its week open price.
No data coming out of Canada today, so the Loonie’s price action would most likely be driven by news coming out of major economies. Special mention goes to the CB consumer confidence report from the US later, as the USDCAD could bust out of its consolidation once the actual result comes out.
Well wadya know? The USDCAD just hit a new yearly high at 1.0854 before closing at 1.0698. My only question is, why couldn’t the USDCAD close any higher? Are there any buyers left out there?
Despite no major data being released, the Loonie took another beating. I’ve got a feeling that traders are pricing in their positions ahead of the next BOC interest rate decision. Nobody on the street knows exactly what Governor Mark Carney and his buddies will decide to do. My buddy Forex Gump recently wrote about the BOC’s dilemma on whether the central bank should raise interest rates given the current economic environment. Check it out!
Nothing on deck today, so we may see the USDCAD stick within the channel that Big Pippin pointed out in today’s chart art. Nevertheless, watch out for data coming out from the US, as durable goods orders will be released at 12:30 pm GMT. This might cause enough volatility to bust up the frequency of that channel!
The Loonie put up a good fight against the greenback yesterday, pushing the USDCAD to a low of 1.0581. No economic reports were released from Canada in the past 24 hours but let’s check out what’s in store for today!
Canada’s economic schedule is free from high-impact reports again, with only the quarterly corporate profits report on tap. Corporate profits were up by 7.9% in the past couple of quarters and another rise could be seen for the first quarter of this year. Of course, higher profits could lead to increased hiring and investment for Canadian firms, which would be good for their economy.
Amongst all the major currencies, the Loonie turned out to be the best performer in yesterday’s trading session. The combination of risk appetite, the speculation of a BOC rate hike, and the rise in crude oil prices pushed the Loonie higher across the board.
No important economic data came out yesterday, but we will be seeing Canada’s current account balance at 12:30 pm GMT later. The expectation is its current account deficit for the first quarter of this year fell slightly to 8 billion CAD from 9.8 billion the quarter before. If the actual figure comes in lower, we will probably see some more buying support for the Loonie.
Despite increased risk aversion last Friday, the Loonie managed to stay afloat versus the dollar. Once again, the possibility of the BOC hiking rates weighed heavily on the minds of traders, which enabled to the Loonie to minimize its losses against the Greenback. The USDCAD ended the day at 1.0519, just 18 pips higher from its opening price during the Asian session.
Better-than-expected results on Canada’s current account balance also provided some support for the Loonie. According to the report, Canada’s current account deficit shrunk to 7.8 billion CAD during the first quarter of this year from 10.2 billion CAD the quarter before.
Canada’s economic calendar offers a lot of red flags this week.
First up, at 12:30 pm GMT today, Canada will release its GDP report. The expectation is that the country grew by 0.5% in March after expanding 0.3% the month before.
Then, on Tuesday, the BOC will release its highly anticipated interest rate decision. With the country’s inflation rate dangerously close to the BOC’s 2% target, economists are expecting the bank to hike rates for the first time in more than a year to 0.50% from 0.25%. Now, if the BOC does NOT increase rates… oh boy, we’ll probably see the USDCAD test May’s highs.
Lastly, this coming Friday, data on Canada’s labor market will be released. The consensus is that 20,700 net jobs were added in May. Meanwhile, the country’s unemployment rate is predicted to have edged lower to 8.0% from 8.1%. Will the positive expectations on the reports give traders another reason to buy up the Loonie? We’ll just have to see on Friday!
With the US markets closed for the holiday, the Loonie turned out to be the big winner in yesterday’s trading sessions. The USDCAD dropped over 100 pips to end the day at 1.0435.
The catalyst that sent the CAD surging ahead was surprisingly wicked GDP data. The economy grew 0.6% in March, slightly higher than the forecasted growth of 0.5%. Furthermore, this brought the annualized first quarter GDP growth to 6.1% - the best figure in over a decade! The data revealed that consumer spending rose 1.1% during the quarter, while the labor market continues to show more strength.
Why did those CAD bulls jump all over this data? Well, tonight, the Bank of Canada will be releasing its interest rate decision tonight! As my buddy Forex Gump said in his blog yesterday, with more and more signs that the Canadian economy is well on its way to recovery, it might just be time for the BOC to raise rates! Expectations are that they may hike rates by 25 basis points, bringing the rate up to 0.50%.
The question I ask is this – has a rate hike already been priced in? After all, just a few weeks ago, we saw the USDCAD dipping its feet at the magical 1.0000 parity mark! In any case, make sure you keep those forex seat belts fastened and risk management rules in break – we could be in for a wild ride tonight!
Oh, Loonie, why did you fall yesterday?! As expected, the Bank of Canada rose its base rate yesterday, but instead of getting a boost, the CAD got stomped on by the USD, erasing all its gains from the previous day.
As Forex Gump recently pointed out in his blog, it wasn’t like traders weren’t expecting a rate hike. I mean, all the evidence was there! All BOC Governor Mark Carney needed to do was raise rates, which is what he and his fellow policy makers did. The only problem was, however, that they gave no clear indication as to when the next interest rate hike would come!
In a statement accompanying the interest rate decision, BOC officials said that with all the uncertainty and instability in the global financial system, they would have to be very careful in implementing tightening measures. So even though the BOC is the first central bank from a G7 nation to hike rates, we may not see another rate hike over the next couple of months. This disappointed traders, who ended up selling the Loonie.
No data coming out over the next couple of days, so we may not see as big swings in CAD trading. Still, watch out for news around the world which could flip risk sentiment on a dime!
With the wind on its back, the Loonie was able to post spectacular gains versus the yen and the dollar yesterday. Did the rally from the Bank of Canada (BOC) rate hike come one day late?
Canada’s underlying fundamentals are still relatively strong, and it looks like traders believe that this will prompt the BOC to do another rate hike sooner or later. Remember that the BOC was the first G7 central bank to raise rates.
No data scheduled to come out of Canada again today, but please do watch out for the ADP employment change from the US. Better-than-expected results may prop up risk appetite, which, in turn, may lead to another rally in the Loonie’s value.
After speeding towards the 1.0350 mark, the USDCAD pair hit the brakes yesterday and drove back to a high of 1.0464. Canada didn’t release any economic figures lately but traders are probably waiting for the results of the employment report before deciding where to take the USDCAD.
Canada’s employment change report, which is due 11:00 am GMT today, could print a 16,800 increase in hiring for May. Although this could keep the unemployment rate steady at 8.1%, the estimated uptick in hiring is much less than the 108,700 rise in employment in April. Still, it could mark the fifth straight monthly increase in jobs, possibly allowing the USDCAD to move south.
Also due from Canada is its building permits report, which could show a 1.8% decline in April. Building permits were up by a whopping 12.2% in the previous month.
However, these releases could be overshadowed by the US non-farm payrolls report, which is due 12:30 pm GMT today. This report could bring in extra volatility for the day so stay on the sidelines if you aren’t ready to handle the fireworks!
So much for celebrating local news! Despite the release of some encouraging data, the Loonie took a hit as traders decided, “I think I’ll play it safe and buy the dollar and yen.” The USDCAD rose almost 200 pips from its opening price to close above the 1.0600 handle.
The good news that I’m talking about was Canadian employment data that was released on Friday. A net number of 24,700 jobs were added to the Canadian economy last May. This was greater than initial forecasts of a rise of 15,000. Apparently, the unexpected surprise was led by hiring in the healthy industry.
Meanwhile, building permits rose by 5.4% last April, while the Ivey purchasing manager’s index printed a reading of 62.7. Both these reprots beat consensus. Time to celebrate right? Right?
NOPE! As usual, US employment reports overshadowed the Canadian versions. The poor results of the NFP report sparked another run of risk aversion, which led to widespread dollar buying.
Nevertheless, the good news should be counted as more reason for the Bank of Canada to keep hiking interest rates in coming months. Be aware that BOC Governor Mark Carney will be speaking tonight at 5:50 pm GMT. Who knows – maybe he’ll gives us more insight as to what the bank has planned over the rest of the year!
Due to the absence of economic data, the Loonie was unable to find a clear direction yesterday. The USDCAD went as high as 1.0680, dropped to 1.0515, before eventually closing out the US trading session at 1.0603.
For today, await the release of Canada’s report on housing starts at 12:15 pm GMT. The expectation is that an annualized number of 203,000 houses began construction in May, which is an improvement from the 201,000 figure seen in April. The positive forecast on the report could help the Loonie stay afloat against the dollar. Still, be aware of oil prices. A close below the $70.00 handle could lead to a USDCAD rally.
The Loonie edged higher against the Greenback in yesterday’s trading, thanks to the pick up in commodity prices and the slight improvement in risk appetite. Even though Canada’s housing starts failed to meet the consensus, Loonie strength pushed the USDCAD to a low of 1.0486.
Canadian housing starts for May only amounted to 189,000 instead of the expected 203,000. This was also lower than the 201,000 housing starts reported for April, suggesting that demand for new homes is starting to wane. With the benchmark rate higher this time, could it mean that the housing market would suffer more weakness brought about by higher borrowing costs? We’ll just have to wait and see!
Meanwhile, Canada won’t be releasing any economic reports today, leaving the Loonie at the mercy of commodity prices and risk sentiment. Keep an eye out for the RBNZ rate decision later today since an upbeat statement could have a positive impact on the Kiwi’s fellow com-dolls.