The Canadian dollar is trading sideways today, having strengthened for the past few days. There has been limited news that has recently influenced the loonie. Earlier, the loonie was selling off thanks to weak economic data and falling crude oil prices. Last Friday, economic growth figures missed expectations, with month-over-month growth for July coming in at 0%, vs. expectations of 0.1%. We recently wrote about the weak outlook for Canadian growth.
USD/CAD is currently trading slightly below 1.2480, having fallen below the critical 1.25 level earlier in the week. The euro has strengthened against the Canadian dollar in the past few days, with EUR/CAD currently trading above 1.4680. Finally, the pound remains flat against CAD, with GBP/CAD just above 1.65.
This week's economic data includes manufacturing PMI data (released Monday), merchandise trade balances on Thursday and unemployment data on Friday. Manufacturing PMIs released on Monday were stronger than the previous release (55 vs. 54.6 prior). Unemployment data will be watched closely as the market debates the odds of future interest rate hikes by the Bank of Canada.