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Oil price action nudged the Loonie to its second consecutive week of losses last week. Think it will continue to move the comdoll around this week?

Let’s take a look at the potential catalysts:

BOC statement (May 30, 2:00 pm GMT)

Back in April the Bank of Canada (BOC) kept its rates steady at 1.25% as expected. And though Governor Poloz and his team upgraded their outlook for the next three years, they also shared that geopolitical and trade tensions (cough, NAFTA, cough) pose risks.

At the end of the day, the BOC believed that “some monetary policy accommodation will still be needed,” which was translated to mean that the central bank is A-okay with standing pat on their policies.

But that was last April. Earlier this month Poloz gave an optimistic speech where he shared that “the need for continued monetary stimulus will also diminish” and that “[W]e are becoming more confident that the economy will need less monetary stimulus over time.

However, he tempered his hawkish statements by warning against the dangers of hiking too quickly.

Will Poloz’ hawkish remarks make its way into the BOC’s statement this week? Make sure you stick around during the release!

Oil-related updates

After getting a boost from at least four catalysts, oil prices are seeing a breather in the past couple of days.

Of course, it might have helped that Saudi Arabia and Russia are reportedly considering upping their oil production by a total of 1 million barrels per day to make up for the time when they had to reign in their capacity to help stabilize a global oversupply situation.

We haven’t seen official statements on the matter but, if confirmed, we might see oil glut fears come back into our regular headlines and spook oil (and Loonie) bulls.

Last Week’s Price Review

The Loonie is the third weakest currency of the week after the euro and the pound (as of 5:00 pm GMT), which marks the second week of net losses for the Loonie.

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

Looking at the overlay of CAD pairs and crude oil above, it’s pretty clear that the Loonie got dragged lower by the slump in oil prices.

Oil prices started to slide during Tuesday’s U.S. session, thanks to rumors that OPEC may decide to raise oil output in June.

The slide in oil prices then intensified on Thursday due to concern over the unexpected rise in U.S. oil inventories and growing fears that OPEC may indeed raise oil output come June.

Friday saw oil prices slump even harder, thanks to a Reuters report that cited unnamed “sources familiar with the matter,” as saying that Russia and Saudi Arabia are supposedly discussing the possibility of “raising OPEC and non-OPEC oil output by around 1 million barrels per day.”

And the slide in oil prices only intensified further when Khalid Al-Falih, the Saudi energy minister, later said that scaling back oil production limits is “on the table” which confirms the earlier rumors. The energy minister did stress that nothing’s set in stone yet, but that didn’t stop oil and the Loonie from sliding further.