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The Canadian dollar was under pressure for most of the week with geopolitical and central bank themes driving down risk sentiment. Canadian data also added to the weakness with jobs and housing data disappointing Loonie bulls.

Canadian Headlines and Economic data
Monday:
- A weak start on Monday in reaction to the news of China halting US agricultural imports in retaliation for Trump’s tariff increase. It’s signal that the damaging trade war between the two countries may get worse and most likely, the catalysts for traders to unload relatively riskier assets like the commodity dollars.
Tuesday:
- Somewhat uniform roller coaster moves for Loonie pairs during the early Asia session, likely on global risk sentiment moves sparked first by a reaction to the U.S. officially labeling China as a currency manipulator to push CAD lower. The turn around later came when the PBOC made moves to limit the weakness in the yuan.
Wednesday:
- A broadly lower session for CAD, mainly on increasing risk-off sentiment on global growth fears that were so strong that central banks have begun starting to cut rates around the world. It’s also likely that the Loonie felt pressure from oil prices, falling on the same risk-off sentiment and the increase in U.S. crude inventory. Check out the chart below of oil:

Thursday:
- A reversal of risk sentiment towards positive through the Thursday session, likely on China’s rhetoric to stabilize the yuan and the positive Chinese trade data, was probably what had traders reversing the Canadian dollar’s weakness from earlier in the week.
- New housing prices were down 0.1% at the national level for the second consecutive month in June
Friday:
- Canada sheds ‘disappointing’ 24,200 jobs in July
- The value of building permits issued by Canadian municipalities declined 3.7% to $8.0 billion in June
- Housing starts for all areas in Canada was 222,013 units in July, down 9.6% from 245,455 units in June
- Risk aversion sentiment rises on the Friday session, likely on the news that the US government won’t do business with Huawei and is not ready to make a trade deal with China.