Oil once again is the main driver for Loonie pairs this week, first pushing it higher on geopolitical tensions before dropping the pairs on the latest oil inventory data.
Canadian Headlines and Economic data
- Oil Rises as OPEC Signals Continued Cuts and U.S. Threatens Iran – Oil strength is likely the catalyst for the broad strength in the Loonie relative to most of the majors with a lack of events from Canada.
- Canadian retail sales increased for the second consecutive month, rising 1.1% to $51.3 billion in March
- Oil set for worst week in 6 months as crude stockpiles surge – The drop in Loonie pairs correlates with the sudden bearish shift on oil prices as seen in the chart below:
- Canadian wholesale sales rose for the fourth consecutive month, up 1.4% to $64.1 billion in March
- Flash U.S. Manufacturing PMI at 50.6 (52.6 in April). 116-month low – the U.S. dollar sold off strongly in reaction to this data which greatly benefited the other major currencies, and is likely the reason why we saw a bounce in Canadian dollar pairs after the event.
- Canadian corporations earned $106.9B in operating profit in Q1, edging down $322M or 0.3% from Q4 of 2018 but 2.2% higher compared with Q1 of 2018.
- U.S. Durable-goods orders slump in April as business investment almost dries up – Once again, weak U.S. data lead to a sell off in the Greenback, benefiting the other major currencies during the Friday U.S. trading session. Without any other direct catalysts, this is likely the reason for the broad bounce in Loonie pairs and oil prices.