The Canadian dollar was mostly flat yesterday and is slightly stronger this morning. There have been a limited number of news stories and events that have directly influenced the Canadian dollar in the past 24 hours. Instead, the currency is primarily trading as a function of movements in other currencies and commodities. If US PPI numbers today and CPI numbers tomorrow are stronger than expected, USD/CAD is likely to strengthen (the Canadian dollar will thus weaken) on US rate hike expectations. Recent strength in crude oil has only had a limited impact on CAD so far. Our trending indicators continue to suggest a bearish outlook for the Canadian dollar in both the short and medium-term time frames.
The USD/CAD exchange rate is currently above 1.2830. The euro is flat against the Canadian dollar. EUR/CAD is currently above 1.510. Lastly, the pound is flat against the Canadian dollar, with GBP/CAD trading above 1.7140.
This is a very light week for economic data and events relating to the Canadian dollar. Data including new housing price index figures on Thursday and manufacturing shipments on Friday are unlikely to move the currency. Instead, CAD is more likely to take cues from movements in Canadian dollar bond markets and crude oil prices. Last week, the loonie sold off after the Bank of Canada disappointed markets.