Make that a hat trick! For the third day in a row, the Loonie has found itself at the back of the net, as it posted its third consecutive day of gains versus the dollar. The USDCAD found itself trading as low as 1.0365, before easing up to close at 1.0442.
With no major catalyst to push the currency lower, it seems to me that traders are just bullish for the CAD right now. Even though the AUD and NZD posted some losses earlier this week, the CAD remained resilient. Let’s see if this hold true today, when trade balance and housing market data are scheduled for release at 12:30 pm GMT.
Canada is expected to have posted a surplus of 700 million CAD last April. This would be a major jump from the previous month’s figure of 300 million CAD and would indicate that demand for Canadian exports is rising.
Meanwhile, the new housing price index is expected to show that housing prices rose by 0.3% last April, keeping in pace with March’s growth. If housing prices continue to rise, it would give more leeway for the BOC to keep hiking interest rates, as it would indicate that the low rates have already stimulated demand in the housing market.
If these reports come out better than expected, it could give the CAD the boost it needs to make new highs versus the dollar.
Also, take note that BOC Governor Mark Carney will be speaking before the International Organization of Securities Commissions at 12:30 pm GMT. He may just drop hints as to whether the BOC will continue to raise rates in coming months, so make sure you keep an eye out on this.
Just like its fellow comdolls, the Loonie turned out to be one of the strongest currencies in yesterday’s trading session. The Loonie marked its fourth winning day, closing almost 130 pips higher against the Greenback.
Economic data from Canada failed to impress though. Instead of showing a 700 million CAD surplus, its trade balance only came out with a 200 billion CAD surplus for April. Moreover, March’s trade balance figures was revised to 200 million CAD deficit, opposite the 300 million CAD surplus initially reported.
No red flags on Canada’s economic calendar today, so keep an eye out for the US retail sales report to determine where the Loonie is headed. Given how risk sentiment has been driving price action, better-than-expected results on the report could provide more fuel for the Loonie bulls to take the currency higher.
Whew! Loonie bulls needed to catch their breath last Friday, forcing the USDCAD to pause from its slide. The pair seemed to find a floor at the psychological 1.0300 handle after weak US retail sales figures stumped risk-taking.
Not even Canada’s better than expected capacity utilization report was able to spur Loonie-buying last Friday, when the unexpected decline in US retail sales brought risk aversion back in the game. Still, the rise in utilization suggests that companies have to increase input in order to keep up with rising demand. Would risk-taking resume with this week’s set of economic figures?
Today, the new motor vehicle sales for April is expected to post a 4.7% decline. Sales of new cars and trucks were already down by 4.2% in March and another decline could weigh the Loonie down. Watch out for the actual report due 12:30 pm GMT.
Come Tuesday, the labor productivity and manufacturing sales reports are due. For the first quarter of 2010, labor productivity is expected to be up by another 1.4%. Meanwhile, manufacturing sales are expecting a mere 0.3% uptick for April, which would be less than the 1.2% growth seen in March.
No economic reports are due Wednesday but be on the lookout for BOC Governor Mark Carney’s speech at 3:50 pm GMT. Hints on the central bank’s future monetary policy moves could determine the Loonie’s direction for the day. Who knows, he could suggest that another rate hike could come up soon! You don’t want to miss out on that, do you?
Only the April wholesale sales report is due Thursday and it could print a 0.4% uptick. This would be much less than the 1.4% increase in wholesale sales last March and a weaker than expected figure could result to a Loonie selloff.
Lastly, the foreign securities purchases report and the leading index are set for release on Friday. After landing at -0.62 billion CAD last March, purchases of Canadian securities are expected to amount to 4.87 billion CAD in April. This could suggest that demand for Canadian stocks, bonds, and other assets is growing. Meanwhile, the leading index could see a 0.8% increase for May, following the 0.9% rise seen in the previous months.
It looked like the Loonie was going to set off for another massive run, as the USDCAD hit as low as 1.0225 in intraday trading. However, the Loonie ended up giving its gains, as an avalanche of risk aversion came in to fill the markets. The USDCAD ended up closing higher than its opening price, finishing at 1.0327.
Clearly, euro zone fears are weighing in on the markets, as even comdolls like the Canadian dollar struggle whenever bad news breaks out. Once word broke out that Greece’s junk… err, I mean bonds… got downgraded to junk status, traders decided to chill out and run back to the dollar.
Looking at today’s economic calendar, we’ve got labor productivity and manufacturing sales data on deck at 12:30 pm GMT. Labor productivity is projected to be up by 1.4% during the first quarter Manufacturing sales, on the other hand, are expected to post growth of 0.3% last April. While this may not be as much as the increase seen in April, its still good news, as it would mark the 8th consecutive month of an increase in sales. If these reports post better than expected figures, it could give the Loonie a slight boost.
Favored by the strong case of risk appetite, the Loonie was able to stage a nice rally against the dollar. The USDCAD ended the US trading session at 1.0250, almost 100 pips lower from its Asian session opening price.
Economic data released was mixed though.
The report on labor productivity showed a 0.7% increase, lower than the 1.4% initially expected. A fall in productivity is usually considered good for the economy because it means that employees received more money for the same amount of work. In a way, you could say that their wages increased. Meanwhile, the manufacturing sales report for April only grew 0.2%, 0.1% lower than forecast. March’s figure, however, was revised up to 1.4% from 1.2%.
No red flags on Canada’s economic calendar[U][/U] today, but we will be hearing BOC Governor Mark Carney talk at 3:50 pm GMT later.
Loonie bulls seemed to have lost their mojo yesterday, hesitating to push the USDCAD further below the 1.0230 area. It looks like BOC Governor Mark Carney’s attempts to downplay another rate hike are working!
The lack of stellar economic figures from Canada was probably one reason why the Loonie was unable to continue its rally. Aside from that, Carney’s remarks about the risks to the Canadian economy caused Loonie bulls to stop in their tracks. According to Carney, it’s still early to tell whether another BOC rate hike is in the cards since Canada has to figure out how to deal with the effects of the euro zone debt crisis. Hmm, for all we know he could simply be trying to cap off the Loonie’s appreciation by saying that the Canadian economy still isn’t as strong as it should be. After all, Canada’s export industry could be better off with a cheaper Loonie…
Moving on, the wholesale sales report due today could give the Loonie bulls a reason to charge again. Wholesale sales are expected to post a 0.4% uptick in April, following the 1.4% growth seen in March. A stronger than expected figure could highlight the strength in the Canadian economy and could possibly give the USDCAD enough momentum to break below 1.0230. Watch out for that at 12:30 pm GMT.
Thanks to some poor data released, the Loonie gave back some of its weekly gains against the dollar. The USDCAD rose to as high as 1.0339, but couldn’t sustain its gains, as it finished the day at 1.0272.
Wholesale sales for the month of April came in disappointing, as they fell by 0.3% from the month before. It was expected that they would rise by 0.4%. The drop was apparently caused by lower automobile sales. If the BOC continues to raise interest rates, we may see sales continue to drop in coming months.
Speaking of the BOC… Governor Mark Carney will be speaking today at 10:30 am GMT. He may drop some comments regarding interest rates, so be on the lookout. Also, be extra careful because this is right before the start of the US session. With European traders off to lunch, we might see large spikes due to thinner liquidity.
At 12:30 pm GMT, keep an eye out for the foreign securities purchases report, as well as the leading index. Analysts project that 2.87 billion CAD worth of Canadian securities were purchased last April, up from the 620 million decrease seen in March. Seeing as how some countries have decided to dump off their euros, it’ll be interesting to see whether they have reallocated their funds towards Canadian assets. Meanwhile, the leading index is expected to increase by 0.8%. This would indicate an improving outlook for the Canadian economy. If these reports come in better than expected, it may just boost sentiment towards the Loonie.
Thanks to some positive economic data, the Loonie was able to post some minor gains against the Greenback last Friday. The USDCAD ended the US trading session at 1.0212, 57 pips lower from its Asian session opening price that day.
The first report that boosted the Loonie came in the form of the foreign securities purchases. It showed that a net value 12.36 billion CAD was invested in Canadian securities, which was almost 10 times the initial forecast! This means that investor confidence towards Canada’s financial and economic standing grew, which is bullish for the Loonie.
The second one is the leading index for the month of May. The consensus was for increase of 0.7% only, but the actual result stood at 0.9%. A rising leading index means that the economic outlook for Canada is improving.
No data coming out today, but Canada presents a couple of red flags in the next couple of days.
Tomorrow, at 11:00 am GMT, Canada’s consumer price index for May will be released. The headline report is expected to show no change in prices while the core version, which excludes the prices of volatile items such as food, energy, and alcohol, is predicted to show a 0.3% rise.
On Wednesday, Canada will publish its report on retail sales for the month of April at 8:30 am GMT. In March, the Loonie garnered quite a bit of buying support when retail sales climbed 2.1%. If the report on Wednesday posts another rise, the Loonie could once again rally.
Loonie bulls got a strong headstart this week as the USDCAD gapped lower and opened at 1.0208. It continued in the southbound direction but hit a roadblock at the 1.0140 level, from which it reversed course and headed towards the 1.0250 area.
China’s announcement about adopting a more flexible exchange rate scheme renewed demand for com-dolls since their economies could benefit from stronger exports. However, the frenzy died down when the BOC released their Financial System review, which revealed that Canadian banks are facing several major risks. This suggests that the central bank could take a less aggressive stance when it comes to hiking rates as they assess the impact of higher borrowing costs on their financial system.
Today, Canada is set to release its inflation figures at 11:00 am GMT. Their CPI for May is expected to show that price levels inched up by 0.1% while the core version of the report could print a 0.3% increase. Weaker than expected figures could be bearish for the Loonie since slow inflation would imply that the BOC would take much longer before implementing another rate hike.
The Loonie was just about to go on its victory parade, a fresh cloud of risk aversion released some rain dosed the markets. The USDAD ended the day at 1.0291 after hitting an intraday low of 1.0182.
The Canadian dollar got a nice boost from CPI reports that were released early in the US session. Consumer prices rose by 0.3% last month, after they were expected to have increased by just 0.1%. Meanwhile, the core CPI also printed a 0.3% increase. This suggests that inflation is indeed picking up, which gives the Bank of Canada more reason to raise interest rates next month. Remember, one way to combat rising inflation is to raise interest rates.
Speaking of our buddies over at the BOC… Deputy Governor Tim Lane said that the Canadian economy has been recovering better than expected, but that the BOC will still have to take into consideration all the risks stemming from the Europe. Still, the optimist in me tells me that we might just see another rate hike next month, especially since we’re seeing more strength in the Canadian economy.
Tonight at 12:30 pm GMT, retail sales data will be available. Sales are expected to have dipped by 0.4% last April. Seeing as how we got a nice upside surprise in March’s figure, can we expect the same for today’s release? If we do see better than expected figures, we may just see the CAD erase some of its recent losses.
Ouch[B].[/B] No thanks to the worse-than-expected Canadian retail sales report, the Loonie was pounded across the board yesterday. The USDCAD found itself at 1.0385 by the end of the US trading session, almost a 100-pip move in the span of 24 hours.
Apparently, retail sales in Canada for the month of April decreased 2.0%, which was five times – yes, five times – faster than the 0.4% fall initially expected. The 2.0% drop marked the first decline in retail sales in five months, giving traders reason to speculate that the Bank of Canada might not raise rates on their next meeting.
Nothing will be coming out of Canada’s economic calendar today, so look to the upcoming US initial jobless claims and durable goods orders report for the Loonie’s direction. If these come in below expectations, the Loonie could be sold-off again on account of risk aversion.
Loonie price action was as rocky as the Canadian Rockies yesterday as it struggled to hold on to its gains. However, Greenback strength soon prevailed and pushed the USDCAD from a low of 1.0361 to a high of 1.0470.
In the absence of economic reports from Canada, the USDCAD was driven mostly by risk sentiment. Weaker than expected core durable goods orders from the US, which saw a 0.9% increase instead of the projected 1.1% rise, dampened investors’ appetite for higher-yielding currencies such as the Loonie.
Canada’s schedule is empty again today, which means that the USDCAD could depend on US economic reports once more. The US is set to release its final GDP reading for the first quarter and the revised consumer sentiment index. If these figures suffer significant downward revisions, risk aversion could loom over the markets and weigh the Loonie down.
At least it wasn’t a sweep! After four consecutive days of losses, the Loonie finally got on track. The USDCAD closed at 1.0358, more than 70 pips lower than its opening price for the day.
The Loonie benefited from a nice run of risk appetite that helped boost commodity trading. With oil being one of Canada’s major exports, any rise in oil prices benefits the CAD.
No major data coming out this week, with the only exception being the GDP report on Wednesday. The economy reportedly grew by 0.2% last April. If growth was bigger than anticipated, it would give even more reason for the BOC to raise rates.
With no other big news coming out, watch out for the results of the G20 meetings that started yesterday. Be careful, any comments about the stability of economic recovery may trigger some wild moves in the markets. With all the choppiness in the markets right now, make sure to keep those risk management rules in check!
Due to the absence of economic reports, USDCAD found itself pacing back and forth with a tight 52-pip range yesterday. The pair ended the US trading session at 1.0355, barely changed from its opening price.
A quick look at Canada’s economic calendar reveals that USDCAD might end up trading the same way as yesterday because only raw materials price index will come out. Although it is considered as a leading indicator of inflation, the index doesn’t normally have an impact on USDCAD’s value. In any case, the index is predicted to show a decline of 1.0% for May, opposite the 1.7% gain seen the month before.
Boo hoo… Risk aversion bullied the Loonie yesterday, forcing it to tumble against the Greenback and the Yen. Because of that, USDCAD darted quickly from the 1.0350 area to a high of 1.0534.
Resurfacing concerns on the euro zone’s debt situation, coupled with downward revisions on Chinese economic data, were just too much to handle for the com-dolls. Apparently, a calculation error was the reason behind the wrongly stated leading indicator for China. The leading indicator previously gave a 1.7% reading and was dramatically revised down to a measly 0.3%. Bah, it looks like China’s future growth outlook isn’t so bright after all! Being an export-dependent economy, Canada’s prospects suddenly dimmed after news of the revision broke out.
It didn’t help that the Canadian economic figures released yesterday failed to post stellar results. Both the raw materials price index and the industrial product price index showed that inflationary pressures toned down in May. Yikes, that could mean that the BOC won’t be too eager to implement another rate hike soon.
Today, Canada is set to report its monthly GDP reading at 12:30 pm GMT. Growth is expected to taper down from the previous 0.6% expansion in February to a mere 0.2% uptick in April. Still, growth is still growth, which means that a positive figure could provide support for the Loonie. However, if the actual figure comes in negative, USDCAD might keep zooming higher.
Ka-chow! The Canadian dollar took a hit yesterday, after the release of some economic data as well as the overall “let’s sell com-dolls!” move yesterday. USDCAD touched its highest level in a month, closing over 75 pips higher to finish at 1.0637.
The poor data that I was referring to was the release of the monthly GDP report. Instead of showing that the economy grew by 0.2%, the report printed what everybody had feared – that there was no growth at all last April! This gave traders reason to believe that the Bank of Canada may just take a break in raising interest rates at their next meeting.
No data for the rest of the week, with Canadians taking a day off today thanks to a bank holiday. Keep an eye out on equity and commodity trading – if we see a drop in these markets, it might signal another sell-off for CAD.
While other major currencies posted stellar gains over the Greenback, the Loonie trade sideways and traded within a 100-pip range. The USDCAD ended the day the US trading session at 1.0598, roughly 50 pips lower from its Asian session opening price.
I have this sneaking suspicion that the reason the Loonie’s relatively poor performance versus the Greenback yesterday was because of Canada’s close economic ties with the US. If economic reports show that the US isn’t doing too well, then Canada could eventually follow suit. In any case, since nothing is scheduled for release from Canada today, we’ll just have to wait and see how the Loonie reacts later when the non-farm payrolls comes out…
Whew! After taking a beating across the charts last week, the Loonie was able to end the week relatively unchanged against the dollar. USDCAD closed only 32 pips higher at 1.0649 from its 1.0617 open price after an intraday low of 1.0557.
The grim employment expectations in the US and the five-day decline in oil prices reduced the demand for the high yielding, oil-related Loonie, sending USDCAD to as low as 1.0321 last week.
Of course, it didn’t help that economic reports from Canada were also weak. Aside from the 7.2% decrease in the raw materials prices that suggested soft manufacturing demand, the GDP report also showed that the Canadian economy didn’t grow in April.
Will the red flags this week turn things around for the currency? The monthly building permits will be reported tomorrow at 12:30 pm GMT. The data is expected to decrease by 0.4% after climbing by 5.4% last April, but a better than expected figure might signal construction, investment, and employment prospects.
The Ivey PMI will also be reported at 2:00 pm GMT on Wednesday, and a reading higher than May’s 62.7 and the expected 64.2 figures might mean more employment and production demand from the purchasing managers.
The unemployment rate will also be on tap this Thursday at 11:00 am GMT, and while the rate is expected to remain at May’s 8.1%, a lower number might mean more spending, which is good for the currency.
The last report from Canada this week will be the housing starts data on Friday at 12:15 pm GMT. Like the building permits, a higher than the expected 194,000 residential building starts last June might signal construction and employment demand.
The fact that the entire US was on vacation yesterday didn’t stop the Loonie from getting pummeled by the USD. As a result, the USDCAD rose 42 pips, landing at 1.0672 at the end of the day. Like I told you countless times, you gotta learn to strike while the iron is hot, Loonie old boy!
With no reports released, the Loonie had to groove to the beat of other markets. The equities market plunged yesterday, making currencies tied to economic expansion (such as the Loonie) less appealing. To make matters worse, crude oil, which is Canada’s biggest export, flirted with a three-week low. Yikes!
Maybe the Loonie can finally find support from today’s release of the building permits figure at 12:30 pm GMT. The report is slated to show a sharp decline in growth, from an increase of 5.4% in April to a decrease of 1.3% in the month of May. Don’t count the Loonie out just yet! It could bounce back up if the report can somehow manage to print an upside surprise.
The Loonie drove the dollar into the bear lair yesterday. USDCAD peaked at 1.0678 before it fell like a rock to the day’s low at 1.0485. It ended Tuesday at 1.0557, giving the Loonie a 97 pip gain.
Equities and commodities were the Loonie’s wingmen that wooed in the bulls. The Dow was up by as much as 168 points in the first hour of trading yesterday, which did the Loonie a lot of good because it shares a high correlation with US stocks. Also, crude oil (which is Canada’s biggest export) was up at $73 per barrel.
However, the wingmen lost their mojo after the London markets closed and their gains started to reverse. Was it an “uh-oh” moment for the Loonie? Hmm, not really.
The surge in stocks and oil was enough to silence the disappointing Canadian data and earn the Loonie a handful of pips. Statistics Canada reported that the number of building permits dropped by 10.8% after April’s 5.90% increase. Although this was worse than the estimated 1.3% decline, the Loonie was able to hold on to some of its gains. I guess the Loonie got a lucky break, eh?
Anyway, today we have the Ivey PMI on tap at 2:00 pm GMT. The consensus is 1.3 points higher than last month’s figure of 62.70, which means that analysts are expecting that Canadian consumers had done a lot of shoppin’ and smilin’ in June. Tune in to that later and see if they’re right!