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Canadian dollar mixed as USD/CAD falls below 1.30

Canadian dollar daily update

BY DEB SHAW | 

Canadian dollar daily update

The Canadian dollar is currently mixed. While the loonie is steady against the US dollar and the euro, it is currently weakening against the British pound. Yesterday, the Canadian dollar ended the day higher against the US dollar. Notably, trading volumes in Canadian dollar futures accelerated relative to the previous session, but were in line with 30-day averages. This suggests that traders bought the currency with increasing conviction. Today's USD/CAD trading range is 1.2780 - 1.3080.  

Following the release of yesterday's Bank of Canada Business Outlook Survey (BOS), the Canadian dollar moved up sharply. Looking at the details, survey respondents indicated that they expect future sales to rise by 16% (versus 6% previously). Businesses also said that labor shortages were more intense, while expecting to increase capital investments by a significant degree. In recent history, the Bank of Canada has increasingly relied on the Business Outlook Survey in order to drive monetary policy decisions. While the BoC is widely expected to raise interest rates next week, the strong BOS survey results means that a rate hike is even more likely. While the Canadian dollar moved up sharply following the report, it gave up some of its gains by the end of the session.

There are no significant domestic economic events on the calender today. As a result, trading in the Canadian dollar is primarily a function of developments across financial markets. As the US dollar continues its ascent, our outlook on the Canadian dollar remains bearish.

The USD/CAD exchange rate is currently above 1.2970. The euro is down slightly against the Canadian dollar, with EUR/CAD currently above 1.5020. The pound is up slightly against the Canadian dollar, with GBP/CAD trading above 1.7110. CAD/JPY is up slightly, and currently trading above 86.30. 

Date Event Actual Previous
October 15 New Motor Vehicle Sales AUG 185.2K 179.6K
October 15 BoC Business Outlook Survey
October 16 Foreign Securities Purchases AUG
October 16 Foreign Securities Purchases by Canadians AUG
October 17 Manufacturing Sales MoM AUG 0.9%
October 18 ADP Employment Change SEP 13.6K
October 19 Core Inflation Rate YoY SEP 1.7%
October 19 Inflation Rate YoY SEP 2.8%
October 19 Retail Sales YoY AUG 3.7%
Updated 
Outlook
Bearish

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