The USD/CAD is poised to test its yearly low at 1.0783 as it teeters slightly above the 1.0800 level. The CAD stands to benefit from improvements in risk appetite even if this week’s economic schedule is a bit light.
No economic reports are due from Canada until Thursday, when it releases its raw materials price index and industrial product price index. Both are leading indicators of consumer inflation. Last month’s raw material price index came as a surprise, recording a 2.2% increase. A modest increase is expected for this month but this would nonetheless highlight the strengthening commodities-oriented economy.
The main event for Canada this week is its GDP release on Friday. The nation’s monthly GDP is expected to fall by 0.4% in May and this weak reading could cause the CAD to give back some of its earlier gains.
Until then, oil prices could be a key factor in driving the USD/CAD pair towards a particular direction. Crude prices seem to be aiming for the $70 per barrel price and, if it hits that mark, we may find the USD/CAD making a new yearly low.