Just as the Canadian welterweight champion, Georges “Rush” St.-Pierre, gave Josh Koscheck a beating in UFC 124, the Loonie pummeled its American counterpart last Friday. But unlike the one-sided championship bout, the Loonie faced a tough battle and was only able to squeeze out an itsy-bitsy 11-pip gain over the dollar. Positive data from both sides of the border saw USD/CAD close just below 1.0100 to end the week.
Not only was the Loonie able to benefit from a rise in commodities last Friday, but it also reported better-than-expected numbers! According to its latest trade balance, from 2.3 billion CAD in September, its deficit had shrunk to just 1.7 billion CAD in October.
Even though this marked Canada’s sixth straight month of posting a deficit, these figures came as a positive surprise because analysts had expected the deficit to remain large at 2.1 billion CAD.
Loonie bulls have strong metals exports to thank for the awesome results. But bears may eventually have the last laugh as it was noted that Canada’s surplus with the U.S., its largest trading partner, had fallen to its lowest level since 1992! It’s hard to imagine Canadian trade taking off with its largest market lagging behind.
In the week ahead, you can look to trade a number of economic events.
First off is a speech to be delivered by BOC Governor Mark Carney today at 5:10 pm GMT. I’m sure you’re aware that as the head of the central bank, whatever he has to say may potentially rock the Loonie. I don’t think I have to remind you not to miss this!
Tomorrow, we pick up with a couple of reports rolling out at 1:30 pm GMT.
Canada’s quarterly labor productivity is due and is expected to show a cool 0.3% uptick following the previous period’s 0.8% downtick. At the same time, October’s leading index will be available and is expected to double the previous month’s 0.2% rise.
On Wednesday we take a look at how the manufacturing industry is doing as the most recent manufacturing sales report is scheduled for release. October is anticipated to show a respectable 0.8% increase in sales, a nice rebound from September’s 0.6% drop.
You know the drill! Upside surprises are usually bullish for the Loonie, so stay alert!