Despite having a top tier event to guide direction, the Loonie was a choppy mess on the week thanks to the slight shift in sentiment by the BOC versus counter currency influences, especially the weak Greenback.
Canadian Headlines and Economic data
- Loonie pairs ticked lower during the U.S. trading session, possibly on weakening global risk sentiment as geopolitical tensions rise in the Middle East (concerns over Iran restarting uranium enrichment)
- Canadian housing starts surge 26% in June -CMHC
- The value of permits issued by Canadian municipalities declined 13.0% to $8.2 billion in May
- Bank of Canada maintains overnight rate target at 1.75% – the initial reaction to the event was a bearish one for the Loonie as it seemed the BOC’s concerns have grown as they seemed to have focused on the possible negative impact from global trade wars in this meeting. But this move was somewhat negated by the weakness in the U.S. dollar that seemed to have lifted the majors after Fed Chair Powell’s testimony basically signaled that a July rate cut is locked in.
- Nationally, new house prices were down 0.1% in May, after remaining unchanged for three consecutive months
- The somewhat broad move lower in Loonie pairs on Friday don’t seem to have a direct catalyst, but a couple of possible arguments could weaker global risk sentiment after a few disappointing economic updates from around the world (disappointing GDP read from Singapore, German wholesale prices way down, weaker-than-expected Japanese industrial production) or a slight pullback in oil prices could have dragged the pair lower: