The Canadian dollar has fallen alongside other commodity currencies in the past day. Recent trade balance data released yesterday was weak, with larger-than-expected trade deficits. 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 above 1.2590, and rose fairly easily above the critical 1.25 level yesterday. The euro has also strengthened against the Canadian dollar in the past few days, with EUR/CAD currently trading above 1.4710. Finally, the pound has been falling against CAD, with GBP/CAD just below 1.6450.
This week's economic data includes manufacturing PMI data (released Monday), 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). Trade balance data from Thursday was a negative, with a higher-than-expected trade deficit (-3.41b vs. -2.6b expected). Unemployment data will be watched closely as the market debates the odds of future interest rate hikes by the Bank of Canada.