No love for the Canadian dollar this week after a surprisingly dovish statement from the Bank of Canada, as well as likely pressure coming from falling oil prices.
Canadian Headlines and Economic data
- A little bit of support for the Loonie during the Morning London session, likely stemming from a positive risk sentiment reaction to comments from China saying part of Phase 1 trade deal text was ‘Basically Completed’
- A broad move lower for Loonie pairs during the U.S. trading session, and without a direct catalysts from Canada and broad risk sentiment, it could the pressure came from oil prices, which took a hit early in the week on forecasts of upcoming data that inventory may be building up and on the idea that it was not yet time for OPEC to talk about output cuts.
- Bank of Canada maintains overnight rate target at 1.75%
- Bank of Canada opens door to rate cut as growth outlook worsens – big hit to the Loonie on the session as the possibility of a rate cut was opposite to the idea before the BOC meeting that the BOC was not interested in cutting rates at all.
- Canadian GDP edged up 0.1% in August, following no change in July
- Canada IPPI ticked down 0.1%, following a 0.2% increase in August; RMPI was unchanged in September, compared with August
- IHS Markit Canada Manufacturing PMI: sharpest rise in production volumes since February
- On top of the net positive Canadian manufacturing PMI some support may have likely on risk-on sentiment after a combination of a positive Chinese manufacturing PMI update, positive U.S-China trade negotiation updates, and a generally positive update from U.S. employment data.