The Canadian dollar sold off yesterday and is stronger today. Despite recent strength in crude oil, the currency has been more strongly influenced by recent indications from the Bank of Canada. Last night, Governor Poloz once again emphasized the Bank's "cautious" approach to future rate hikes. Specifically he said that "while the economy is likely to require less monetary stimulus over time, we will be cautious in making future adjustments to our policy rate." Poloz's decidedly neutral tone is a big change from his comments earlier in the year. As rate hike expectations fall, the Canadian dollar is weaker as a result.
The USD/CAD exchange rate is currently above 1.2750. The euro was slightly higher against the Canadian dollar yesterday, and is flat today. EUR/CAD is currently above 1.4790. Lastly, the pound is down against the Canadian dollar, with GBP/CAD trading above 1.6740.
Beyond a Bank of Canada speech and press event, this is a pretty light week for the Canadian dollar economic calendar. On Monday, Ivey PMIs were higher than the last print (63.8 vs. 59.6 prior). On Tuesday, Governor Poloz remained "cautious" in his outlook for future rate hikes in a speech in Montreal. On Wednesday, we’ll see October housing starts and build permits. Finally on Thursday, we’ll see the New Housing Price Index for September. Last week, trade balance figures and unemployment numbers missed expectations.