Looks like the Loonie is up for a data-light trading week from Canada. So, which catalysts can move the comdoll around? Here’s a list.
Monthly GDP (Jan. 31, 2:30 pm GMT)
Canada’s economy expanded by 0.3% in October, which is faster than the 0.1% uptick that we saw in September. A closer look told us that manufacturing, finance, and insurance and wholesale trade led the gains for the economy.
Unfortunately, the better-than-expected numbers did nothing for Loonie traders, who were busy pricing in a disappointing retail sales report at the time.
This week analysts expect to see the GDP dipping by 0.2% for the month of November. After all, retail, wholesale, and manufacturing activity all slowed down, and could offset the improvement in labor market data that we saw during the month.
Significant weaknesses from the previous release would strengthen the case of the Bank of Canada (BOC) sitting on its current rates in the foreseeable future. Make sure you don’t miss out in case we see volatility!
Market risk sentiment
With not a lot of data coming out from Canada, Loonie traders will likely take more cues from overall risk sentiment.
We know from last week’s price action that the Canadian dollar had fallen when China’s GDP and other key economic indicators from around the globe had shown weaknesses, and then popped higher when risk appetite turned around near the end of the week.
Over the next couple of days, pay attention to headlines related to Uncle Sam’s economic data, China’s official PMI reports, Brexit, and any news that might move crude oil prices.
Good luck and good trading!
Missed last week’s price action? Read CAD’s price recap for Jan. 21-25!