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We’ve got tons of top-tier events from Canada this week! What are markets expecting and how can they affect the Loonie’s price action?

Here are economic events you should pay attention to!

CPI numbers (Jan 22, 1:30 pm GMT)

  • Monthly inflation fell by 0.1% after a 0.3% uptick in October
  • Higher energy prices boosted annualized inflation from 1.9% to 2.2% in November
  • CAD went up across the board and stayed up until the end of the day
  • Analysts see annualized CPI maintaining its 2.2% reading in December
  • Unless we see significant hits or misses, traders will likely pay more attention to BOC’s event

BOC’s policy decision (Jan 22, 3:00 pm GMT)

  • The Bank of Canada (BOC) will publish its monthly interest rate statement, quarterly monetary policy report, and conduct a presser at 4:15 pm GMT
  • Last month BOC kept its rates steady and hinted that a rate cut isn’t on the table anytime soon
  • CAD hit new intraweek highs against its counterparts and stayed in the area until a weak jobs data at the end of the week dragged it lower
  • Traders don’t expect policy changes from the BOC this week

Retail sales (Jan 24, 1:30 pm GMT)

  • Retail trading fell by 1.2% in October – the sharpest since November 2018 – on lower motor vehicle and parts sales
  • CAD dropped across the board but recovered some of its losses before the day ended
  • Analysts see headline retail sales gaining 0.5% (from -1.2%) in November while core retail sales could improve from -0.5% to 0.4% for the month

Crude oil prices

  • Political tensions in Libya and Iraq, as well as U.S. oil supply updates can affect demand for crude oil (and oil-related CAD)
  • Black Crack prices didn’t influence CAD’s price action much last week. Still that doesn’t mean we won’t see correlated moves this week

Technical snapshot

  • Williams %R considers CAD as “overbought” against JPY and GBP

  • GBP/CAD is “bullish but weakening” with long-term SMAs and “bearish” on shorter-term SMAs. Watch out for potential retracements or longer-term reversals

Missed last week’s price action? Read CAD’s price recap for January 13 – 17!