Yesterday was a topsy-turvy one for the Loonie as it zigzagged against the Greenback. USD/CAD opened at .9799, climbed to a high of .9873, then closed at .9820. Which reports can push this pair out of consolidation for today?
Canada’s manufacturing sales missed expectations yesterday as it logged in a 1.5% drop for June instead of the expected 0.3% decline. Since this report is usually considered a leading indicator of economic health and a gauge for future hiring and spending, we should probably brace ourselves for more weak figures from Canada. Yikes!
Today, only the foreign securities purchases report is due from Canada. Recall that this report has been showing stronger than expected readings for the past three months and could beat expectations again this time. The market consensus is that long-term purchases of Canadian securities amounted to 10.33 billion CAD in June. Stay tuned for the release at 12:30 pm GMT because another strong figure could provide support for the Loonie.
Just like a good, old fashioned hockey fight, the Canadian dollar joined in on the fun and romped all over the U.S. dollar. The Loonie fell to as low as .9775 before closing at .9798, good for 22-pip drop on the day.
The Canadian dollar rallied, despite the poor result of the foreign securities purchases report. The data showed that instead of buying up 10.33 billion CAD worth of long-term Canadian financial assets, foreign investors sold 3.46 billion CAD. This marked the first time since May 2010 that investors were net sellers. Could this mean the start of a new trend, or is it just a one month aberration?
Today, we’ve got the leading index and wholesale sales coming out at 12:30 pm GMT. The leading index is projected to tick 0.3% higher, indicating better prospects for the Canadian economy. Meanwhile, wholesale sales are seen to have grown by 0.3% in June. If these reports come in much better than expected, it could give the Canadian dollar the boost it needs to break for new highs.
Boom, it’s on! After days of consolidating, USD/CAD finally broke out of the descending triangle and reached a high of .9940. The pair closed at .9887, which was 90 pips above its .9797 day open price. Can it keep up its rally until parity?
News that Morgan Stanley downgraded their global growth forecasts brought another wave of risk aversion in the markets yesterday. U.S. equities dropped sharply, with the DJIA falling by more than 500 points again. This was worsened by the release of a couple of weak economic figures from the U.S., namely the existing home sales report and the Philly Fed index. Check out my U.S. commentary to find out how those reports turned out!
As for Canada, economic data also missed the mark. Their leading index for July came short as it printed a mere 0.2% uptick instead of the expected 0.3% increase. On top of that, the figure for June was revised downwards to show a 0.1% reading. Wholesale sales also disappointed when it chalked up a 0.2% increase, a notch lower than the predicted 0.3% rise for June.
For today, Canada is set to release its CPI reports at 11:00 am GMT. After dropping by 0.7% in June, headline inflation is expected to rise by 0.2% in July. Core inflation is also expected to rise by the same amount. Keep an eye out for worse than expected results because these could be enough to push USD/CAD all the way up to parity!
The Loonie had a fight on its hands last Friday as CPI data failed to give it a lasting boost. In the end, USD/CAD finished practically unchanged at .9886. Will last Friday’s doji signal the start of a reversal?
CPI forecasters really hit their mark when they predicted month-on-month inflation to clock in at 0.2% last month. As expected, annual inflation eased as it dropped from 3.1% in June to 2.7% in July. One explanation for the big drop is that the introduction of higher sales taxes in three provinces is no longer included in calculations for CPI.
Inflation remains well above the Bank of Canada’s target of 2.0%, but it is now a full percentage point below the 8-year high recorded last May. This gives the BOC a bit of leeway should it decide not to increase interest rates for the rest of the year.
In other news, BOC Governor Mark Carney warned about the effects of the European debt crisis and the U.S.'s economic slowdown, saying that the Canadian economy might have contracted in the second quarter. However, he did also try to calm markets by saying that the central bank is ready to act if the poop hits the global economic fan. Though the BOC is one of the few central banks expected to raise rates rather than lower them, a contraction in the economy would greatly reduce the chances of rate hikes.
No data coming out from Canada today, but tune in tomorrow at 12:30 pm GMT if you want some action! The June retail sales report will probably give you a good opportunity to trade the news. Survey says the report will print a healthy 0.6% rise in retail sales, a nice followup to the 0.1% increase in May. Don’t you dare miss it!
The Loonie pulled off a perfect V-move against the dollar yesterday. USD/CAD dropped to a low of .9829 before dollar bulls charged and pushed it up the charts to close the day only 6 pips below its opening price at .9901.
Then again, a win is a win, right?
Without any economic data on tap from the U.S. and Canada, the Loonie merely followed the move in oil (Canada’s biggest export) which rose sharply in yesterday’s trading.
Hmmm, I wonder if the Loonie will be able to end today’s trading with a respectable win given that we have the retail sales report for June on tap at 12:30 pm GMT. Analysts are expecting to see a 0.6% increase in consumer spending for the month following May’s retail sales report which printed at 0.1%. Excluding cars, the core retail sales figure is anticipated to come in at 0.3%.
Once again, the Loonie found itself trading from side to side as Canadian retail sales data didn’t have a lasting effect on the currency. After dipping down to an intraday low of .9849, USD/CAD climbed back up to close just 21 pips lower on the day at .9880.
Though risk appetite was up and retail sales data rose more than expected in June, the Loonie lagged behind other higher-yielding currencies and only managed to score a few pips against the USD. Retail sales climbed 0.7% from May to June, exceeding forecasts by 0.1%, as car sales carried the brunt of the load. But as it turns out, this figure didn’t excite Loonie bulls too much because core retail sales, which excludes the boost in car sales, declined 0.1% month-on-month.
Nothing big on the economic calendar for Canada today. In the meantime, be sure to keep oil prices and risk sentiment in sight! Peace!
Once again, the Loonie did what it does best – range! USD/CAD traded within a tight range of 56 pips, eventually ending the day 12 pips lower at .9868.
With no major data coming out and everyone still waiting for the Jackson Hole Symposium, trading has been as boring as watching Pipcrawler watering his plants. Oops, didn’t mean to share your secret passion Pipcrawler!
Kidding aside, we can probably expect more ranging until tomorrow. Till then, you can try your luck at scalping! Good luck!
The battle of the Loonie bulls and bears yesterday ended in a stalemate as USD/CAD closed the day barely changed. There was a lot of movement during the day but by the end of the U.S. trading session, USD/CAD was sitting at .9874, just 8 pips higher from its Asian session opening price.
Market participants probably couldn’t pick a direction because of the mixed data that came out. On the one hand, the corporate profits report from Canada printed a 4.9% decline, opposite the 4.2% gain seen the previous quarter. On the other hand, the unemployment claims in the U.S. was worse than expected.
No data scheduled to come out today, but that doesn’t mean the Loonie won’t be seeing any action! At 12:30 pm GMT, the U.S. preliminary GDP report will print. The Jackson Hole Symposium will also happen at 2:00 pm GMT. Both these reports are biggies and could have a strong indirect impact on the Loonie’s value.
After zooming higher early in the New York session, the Canadian dollar rallied thanks to a sharp dollar sell-off. USD/CAD hit a high at .9925 before falling nearly 100 pips to close at .9830.
Similar to its comdoll siblings, the Canadian dollar took full advantage of broad USD weakness. As long as the traders anticipate more QE measures from the U.S., the Canadian dollar should stand to benefit over the next couple of weeks.
Looking ahead, the only red flag from Canada that I see is Wednesday’s monthly GDP report. Expectations are that the Canadian economy grew by 0.2% last June, which would be a nice improvement from May’s dismal 0.3% decline.
Just like Beyonce at the VMAs, the Loonie definitely felt the love during yesterday’s trading. USD/CAD opened the week at .9799 and ended the day at .9772 after hitting its 3-week low at .9740.
There wasn’t any economic report released from Canada yesterday but there was enough risk appetite to go around and allow the comdoll to post a win against the dollar.
I wonder if the Loonie will be able to extend its wins today given the data we have listed on our forex calendar.
At 12:30 pm GMT, the current account report for Q2 2011 is anticipated to show an account deficit of 13.6 billion CAD. Watch out for a better than expected figure as this would be bullish for the Loonie and may indicate higher foreign demand for the currency.
Unlike its fellow comdolls, the Loonie wasn’t able to jump in the dollar-aversion frenzy yesterday. USD/CAD even went up to an intraday high of .9818 before it capped the day with an 8-pip gain at .9780. What gives?
As it turned out, Canada’s fundamentals outweighed the dollar aversion yesterday. Data released from Canada yesterday revealed that the country’s trade deficit widened to 15.3 billion CAD in the when markets were only expecting a deficit of 13.6 billion CAD for the second quarter. That’s Canada’s second largest deficit EVER!
I guess Canada’s exposure to the U.S. economy is really taking its toll, huh? Even the raw materials purchased by manufacturers dropped by 1.2% in July, while the change in the price of goods sold by manufacturers also slipped by 0.2% for the month.
Let’s hope Canada’s trade deficit doesn’t weigh much on its GDP! At 12:30 pm GMT today Canada will release its GDP numbers for the second quarter. Analysts are expecting the economy’s growth to flatten at best after it fell by 0.3% in its last reading.
Watch this report closely, kids!
And just when the Loonie thought it was gonna bring home the bacon when it reached a high of .9725, dollar bulls pounced in and pushed USD/CAD up the charts to end the day 12 pips above its opening price at .9793.
However, considering that risk aversion was in play and the mixed GDP figures for Q2 2011, a 12-pip loss ain’t so bad for the Loonie. On a monthly basis, the economy grew by 0.2% which was in line expectations. But year-on-year, Canada’s economy shrank by 0.4%. Yikes!
I dug a little deeper into the report and I found out that trade took a toll on growth as imports rose and exports fell.
Our forex calendar is blank for reports from Canada today so make sure you get a good feel of market sentiment, ayt? Keep in mind that the Loonie usually rallies when risk appetite picks up.
Renewed euro zone debt concerns? So what? The Loonie remained strong against the safe haven dollar yesterday as it was able to hold below the .9800 handle. USD/CAD ended the U.S. trading session at .9759, marking a 35-pip gain for the Loonie.
No economic data was published from Canada yesterday and nothing will come out again today but that doesn’t mean that the Loonie won’t be seeing any action today though! In fact, we’ll probably see a lot more volatility since the U.S. will publish its monthly non-farm payrolls report.
The report, which will come out at 12:30 pm GMT, is expected to show a gain of 74,000 jobs. Last month, the report came in better than expected and reported a 117,000 increase. If the actual figures later disappoint, we may see the Loonie continue to rally versus the dollar. Forex Gump did an excellent analysis on the upcoming NFP so go check his blog out!
After consolidating for almost an entire week, USD/CAD jumped from the .9750 area on Friday and landed at .9842. Canada didn’t release any economic reports then. Any guesses on what caused the upside breakout?
If you answered NFP, then you are correct! The U.S. employment report completely missed expectations and printed a dismal zero reading, causing risk aversion to take over the markets. To get a blow-by-blow account of the NFP report, I suggest you head over to my U.S. economic commentary!
Aside from causing a flight to the safe-havens, the U.S. NFP had a negative effect on the Canadian dollar mostly because Canada is very dependent on the U.S. economy. After all, the U.S. is Canada’s number one trade partner since they’re so geographically close to each other.
Canada is still on a Labor Day holiday today, which means that there aren’t any economic reports on its schedule. The Loonie will probably jump to action on Wednesday when the BOC makes its interest rate decision. Although the central bank is expected to keep rates steady at 1.00%, the accompanying monetary policy statement could have plenty of clues on what Mark Carney and his men have in store for the Canadian economy. Also due then is the Ivey PMI, which could climb from 45.4 to 46.7 in August.
Then, on Friday, Canada is set to print its employment data for August. Although the report could print an increase in net hiring, the jobless rate is expected to climb a notch from 7.2% to 7.3% for the month. Also due then are the Canadian housing starts, which could print a 200K figure.
For the second straight trading day, the Loonie was unable to defend against the Greenback’s advances. It didn’t matter that Canada was on holiday, the market was just so risk averse that they just had to get their hands on some Greenbacks. USD/CAD ended the day U.S. trading session at .9907, 58 pips higher from its opening price that day.
The bout of risk aversion was the result of financial worries in the euro zone popping up again. Apparently, ECB President Jean-Claude Trichet was caught saying that Italy should exert its full effort in implementing their austerity plan. To make matters worse, there was a news headline that said that a senior IMF economist believes that Greece would have to default before March 2012.
No tier 1 events from Canada today, so unless unexpected news events come out, we probably won’t see the Loonie exhibit as much movement as yesterday. Keep a close eye on significant support and resistance levels on the Loonie as they could very well hold!
Whew! Unlike its other comdoll buddies, the Loonie held steady (and even sneaked a few pips) against the Greenback despite the crazy volatility in markets yesterday. USD/CAD tipped an intraday high of .9964 before it leveled off with a 9-pip loss at .9898.
After enjoying a nice long weekend last Monday, Canada took another chill pill yesterday and didn’t release any economic reports. Too bad the markets weren’t in the mood for chillin’!
Aside from the SNB’s big news yesterday, the markets also started pricing in the BOC’s interest rate decision scheduled today at 1:00 pm GMT. You see, while some analysts believe that the BOC might raise its interest rates, others also think that a rate cut is in the works.
Well, we’ll just have to stay glued to the tube to find out which direction the BOC would take! If the BOC interest rate decision proves to be a non-event though, you can always trade the IVEY PMI coming up today at 2:00 pm GMT. Markets expect the data to increase to a 46.7 reading from its 45.4 figure in July, but an upside surprise could send USD/CAD lower in the charts.
Finally, after four straight days of tasting defeat, the Loonie squeezes in a win against the Greenback! Though the BOC rate statement wasn’t so Loonie-bullish, the Ivey PMI provided enough support for the Canadian currency. As a result, USD/CAD slipped from an intraday high of .9910 to finish 43 pips lower on the day at .9855.
Forex Gump was right on the money when he predicted that theBOCwould keep rates at 1.00% and sound dovish! The tone in the BOC’s statement was somber yesterday as it claimed that the need to withdraw stimulus has diminished. If you recall, the central bank had once said that it would “eventually” withdraw support. Has it changed its mind? It certainly sounded concerned about the weakness in the U.S., its largest trade partner, and the grim outlook for the global economy. But whether this is enough to cause the central bank to cut rates later in the year is yet to be seen.
On a more positive note, the Ivey PMI for August surprised everyone by coming in above forecast.
The index rose from 45.4 to 57.6, instead of just 46.7 as many had predicted. In doing so, it destroyed expectations for another month of contraction, and instead, posted another month of expansion. Boo yeah!
Up ahead, at 12:30 pm GMT, we have more Canadian data to digest. Building permits data is expected to show a 0.2% rise after climbing by 2.1% in June. Meanwhile, Canada’s trade balance is anticipated to show a slimmer deficit of 0.8 billion CAD, down from 1.6 billion CAD. Be sure to catch these reports, fellas! It may be just what USD/CAD needs to gain downward momentum!
Curse you risk aversion! Despite positive data from Canada, the Loonie still wasn’t able to end the day with a win against the Greenback. USD/CAD ended the day higher at .9880 after opening at .9855. Boo!
It was reported yesterday that Canada’s trade deficit narrowed in July when the trade balance report printed as expected at 800 million CAD. The report should’ve been bullish for the currency since it’s smaller compared to the 1.4 billion CAD deficit we saw for June. On top of that, building permits issued during the same month surged by 6.3% and beat the consensus which was for a measly 0.2% uptick.
Hmmm, I wonder if there’s enough risk aversion for traders to ignore today’s roster of top-tier economic data too.
At 11:00 am GMT, the employment change report for August will be released and it is eyed to print an increase of 24,200. Meanwhile, the unemployment rate is anticipated to tick higher than June’s reading at 7.3%.
Then at 12:15 pm GMT, we’ll get dibs on the country’s housing sector with data on housing starts due to be released. Market junkies are eyeing the report to print at 200,000.
For the Loonie, last Friday night was nothing like Katy Perry’s song and I’m pretty sure the Canadian dollar wouldn’t want to do it all again. The Loonie lost more than a hundred pips to the U.S. dollar, with USD/CAD jumping from the .9850 area to a high of .9980. Now that the pair is nearing parity, will we see it break or will it hold?
Weaker than expected Canadian jobs data triggered a Loonie selloff last Friday, as Canada reported a 5.5K decrease in net hiring for August. That marked their first drop in employment in five months! This was enough to bring their jobless rate up a notch from 7.2% to 7.3%, possibly an effect of the Canadian economy’s contraction during the second quarter of the year.
It didn’t help that Canadian housing starts report also churned out poor figures for August. The report showed a 185K reading, less than the projected 200K increase in new residential buildings being constructed. With these bleak data, many traders worried that the Canadian economy could be in for another economic contraction for the third quarter of 2011. If that happens, it would signal a double-dip recession in the country, which is definitely bearish for the Loonie.
There aren’t much reports on Canada’s schedule for this week, which means that the bearish bias for the Loonie could carry on unless we see a sudden shift in risk sentiment. Still, it’d help to keep an eye out for the capacity utilization data due Wednesday, the manufacturing sales report set for release on Thursday, and the foreign securities purchases data on tap for Friday. Stronger than expected figures could keep USD/CAD under parity but if risk aversion prevails, the pair could make a big break.
Nothing like a short trip across parity and back! Once again, the magical 1.0000 mark held, as the Loonie bulls couldn’t sustain a bullish run. After testing as high as 1.0027, USD/CAD dropped over a 100 pips during the New York session and eventually closed at .9928, down 46 pips on the day.
The Canadian dollar was able to buckle its early losses as risk appetite improved during the New York session. I wonder though, how much longer can the pair stay below parity? Unlike Pipcrawler’s hair gel, parity won’t hold up forever, so it may only be a matter of time till we see a break of the 1.0000 handle.
Nothing coming out over the next couple of days but make sure you keep an eye out for developments out of the euro zone. Market sentiment will most likely take its cue from what happens in Europe, so make sure to stay on your toes and be ready for anything!