After weakening for the last two days, the Canadian dollar continues to weaken this morning. As WTI prices continue to fall, the Canadian dollar is falling as a result. Looking at data, producer prices (input inflation) were higher than expected. Month-over-month producer prices came in at 1% (year-over-year figures were 1.8%). Looking at news, Bank of Canada governor Poloz remarked that high house prices and consumer debt remains a significant threat to the Canadian economy. As the economy decelerates, future rate hikes are becoming more and more unlikely.
The USD/CAD exchange rate is currently above 1.2830. The euro is up against the Canadian dollar. EUR/CAD is currently above 1.5220. Lastly, the pound is up sharply against the Canadian dollar, with GBP/CAD trading above 1.710.
This week's economic data releases include a speech by Poloz later on Tuesday, current account figures on Thursday and GDP figures and unemployment numbers on Friday. GDP figures will be watched closely as recent economic data suggests that Canadian growth is slowing. Last week, CAD sold off following weak retail sales estimates.