While the Canadian dollar benefited from weakness in the US dollar yesterday, the currency is selling off this morning. Crude oil prices are broadly lower following data that showed US crude oil production is approaching all-time highs. The Canadian dollar tends to track benchmark WTI prices given the economy's reliance on commodity exports. Upcoming house price index data is unlikely to move the currency. Instead, markets will be paying attention to BoC Governor Stephen Poloz's speech later today. He will address the topic of 'Issues keeping the Governor awake at night' later today. Given the open-ended nature of the topic, it is likely that his speech will cover areas that affect the Canadian dollar. 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 up slightly against the Canadian dollar. EUR/CAD is currently above 1.5170. Lastly, the pound is up against the Canadian dollar, with GBP/CAD trading above 1.7260.
This is a very light week for economic data and events relating to the Canadian dollar. Data including new housing price index figures later today 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.