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Last week Loonie bulls and bears took their cues from top-tier Canadian reports and news from Trump’s administration. Which catalysts can influence the comdoll this week?

BOC Governor Poloz’ speech (March 13, 2:15 pm GMT)

We know from details below that the Bank of Canada’s (BOC) worries over “trade policy developments” as well as its conviction that “policy accommodation will likely be needed” have caused intraday selloff for the Loonie.

Let’s see if Governor Poloz repeats the same sentiments this week. Although the text of his speech will be published 15 minutes earlier, his gig in Ontario will also have a Q&A part with the audience. Watch out for hints on just how long he and his team are planning to keep their policies steady!

NAFTA, tariff-related updates

Trump might have given Canada a 30-day reprieve from steel and aluminum tariffs, but that doesn’t mean that it’s gonna be unicorns and butterflies for the economy!

Over the next couple of days watch the newswires closely for updates on how major economies are reacting to Trump’s tariffs. And, of course, keep your eyes peeled for updates on the Trump administration that may or may not influence overall risk sentiment.

Last Week’s Price Review

The Loonie is mixed for the week (as of 6:00 pm GMT). Despite the mixed performance, however, price action on the Loonie was actually somewhat uniform, so the Loonie wasn’t necessarily being pushed around by its rivals.

Overlay of CAD Pairs & Crude Oil (Black Line): 1-Hour Forex Chart
Overlay of CAD Pairs & Crude Oil (Black Line): 1-Hour Forex Chart

A quick glance at the overlay of CAD pairs and oil above shows that the Loonie took some directional cues from oil, but didn’t really pay attention to oil that closely during the week.

So, what else was driving the Loonie’s price action?

Overlay of CAD Pairs: 1-Hour Forex Chart
Overlay of CAD Pairs: 1-Hour Forex Chart

Well, as you can see above, the Loonie slumped across the board on Monday, apparently as a reaction to the following tweets from Trump.

The Loonie also later jumped higher on most pairs (except against the other comdolls) on Tuesday, thanks to news that North Korea is open to denuclearization talks, which caused commodities to jump, including oil prices.

However, trade war fears resurfaced after Trump’s economic adviser, Gary Cohn, resigned. And quite naturally, that also put the hurt on the Loonie.

The Loonie then steadied after that before getting hit by another wave of sellers when the BOC announced its latest monetary policy decision, very likely because the BOC warned that “Trade policy developments are an important and growing source of uncertainty for the global and Canadian outlooks.”

Also, the BOC reiterated its forward guidance that “some continued monetary policy accommodation will likely be needed to keep the economy operating close to potential and inflation on target.” And that may have disappointed some market players.

Fortunately for the Loonie, rumors began to circulate that Trump plans to exempt some countries from tariffs. And one of these countries is supposedly Canada.

As it turns out, those rumors were true since Canada was granted a conditional exemption, which caused the Loonie to rally some more.

Canada’s jobs report was released on Friday and jobs growth failed to meet expectations (+15.4 vs. +17.5K expected). Not only that, 39.3K full-time jobs were axed. However, that only served as a minor speed bump for the Loonie since it continued to climb higher against its peers, except against its fellow comdolls.

Anyhow, the Loonie’s early slide and later recovery are the reasons why the Loonie is mixed for the week, even though price action was actually somewhat uniform.