The Loonie was set for a bullish week on positive Canadian economic updates, but negative geopolitical news had Loonie pairs mixed and net down by the weekend.
Canadian Headlines and Economic data
- Oil Jumps On Bullish API Inventory Data – the Loonie shifts back into rally mode during the Tuesday session, and with a lack of catalysts from Canada or geopolitical updates, it’s likely the rally in oil was the main contributor to the move.
- Real gross domestic product was up for a third consecutive month in May, rising 0.2% – the Loonie kicked into rally mode after another positive GDP update, but was later tempered by USD strength after the not-so-dovish FOMC monetary policy statement.
- Prices for products manufactured in Canada were down 1.4% in June. Prices for raw materials purchased by manufacturers operating in Canada decreased 5.9%
- IHS Markit Canada Manufacturing PMI: Manufacturing PMI hits four-month high in July
- Trump announces new tariffs on $300 billion in Chinese goods – this event set global financial markets into fear and uncertainty mode as traders were caught off guard given the earlier rhetoric in the week was that U.S.-China negotiations were ‘constructive.’ The Loonie strongly fell against the “safe haven” currencies while rallying against the other comdolls and the Brexit-weakened Sterling. We also saw a big drop in oil prices as global risk aversion sentiment became the driving theme.