The Canadian dollar had a choppy week on mixed Canadian economic updates, but ended up net negative as surprise geopolitical events on Friday rocked traders into hitting the sell buttons on the Loonie and oil into the weekend.
Canada Headlines and Economic data
- Without direct catalysts from Canada, the Canadian dollar saw brief volatility during the London and U.S. trading sessions, thanks to moves in the oil, Canada’s largest export product. First, an attack on a Saudi oil field had oil traders hitting the buy buttons, but the rally was dampened a bit on headlines that OPEC cut its forecast of global oil demand in 2019.
- Canada CPI rises +0.5% m/m, +2.0% y/y – this update was both better-than-expected and better-than-previous reads, reducing the probability of a need for the BOC to cut interest rates and sparking the broad move higher in Loonie pairs.
- Canadian wholesale sales rose 0.6% to $64.1 billion in June, partly offsetting the 1.9% decline in May
- Canada’s Trudeau says won’t back down in dispute with China, urges restraint in Hong Kong
- Sales in the Canadian retail trade sector were essentially unchanged in June.
- Risk aversion sentiment picked up big time during U.S. session on Friday to send the Loonie lower against the other major currencies. The volatility came after news that China will retaliate with tariffs on $75 billion worth of US goods and resume auto duties, and the fears accelerated after Trump orders US companies to look for ‘alternative to China’ in tweet to fuel the trade war flames. Oil prices, which were already on the downswing ahead of Friday’s events, was kicked another 3% – 4% lower after the surprise headlines.