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The Loonie closed out what was a mostly choppy, mixed week as a net loser. CAD traders were battling between global risk sentiment, positive Canadian updates and rising oil prices.

Overlay of CAD Pairs: 1-Hour Forex Chart
Overlay of CAD Pairs: 1-Hour Forex Chart
CAD Weekly Performance from MarketMilk
CAD Weekly Performance from MarketMilk

Canadian Headlines and Economic data

Monday:

Canadian Manufacturing sales rose 1.5% to $53.8 billion in September – sales in September were 3.6% below their pre-pandemic levels in February.

We saw a net positive session for the Canadian dollar, likely with the help of broad risk sentiment flows given its under performance against the other Comdolls. Traders were feeling positive during the Monday session after news hit the wires of another positive COVID-19 vaccine trial outcome (Moderna says preliminary trial data shows its coronavirus vaccine is more than 94% effective).

The risk rally seems to have been limited, likely as traders remembered that cases were rapidly rising and mandatory lockdowns were quickly coming from governments across the U.S. (much of California ordered back into lockdown) and Europe (Germany’s Merkel pushes stricter COVID measures). But overall it was supportive of both CAD and oil prices on the prospects of a global economic reopening when a vaccine finally comes.

Overlay of CAD Pairs & Oil (Black Line): 1-Hour Forex Chart
Overlay of CAD Pairs & Oil (Black Line): 1-Hour Forex Chart

Tuesday:

Canada housing starts up in October on more detached units: CMHC – “The seasonally adjusted annualized rate of housing starts rose to 214,875 units from a revised 208,715 units in September”

Canadian wholesale sales grew 0.9% to $66.2 billion in September and remained higher than February’s pre-COVID-19 level for the third straight month.

The Loonie was a net under performer on the session as traders shifted negative in risk sentiment during the Tuesday session. Focus seems to have changed from positive vaccine updates to rising  virus restrictions throughout the U.S. and Europe, and concerns of a no-deal Brexit may have been a factor as well.

Wednesday:

Canada’s annual inflation rate accelerates to 0.7% in October – “The result beat analysts’ estimates of an annual 0.4% increase in October. Excluding gasoline, prices rose 1.0% in October from a year earlier, matching September.”

Canadian homes prices rise again in record October: Teranet – “Canadian home prices rose 1.3% in October from September, the strongest gain for an October in the index’s 22 years”

Thursday:

Employment in Canada decreased by 79,500 m/m in October – ADP – this was much better than the September decline of about 564K jobs, and August’s decline of -771K jobs.

Friday:

Prices for new homes in Canada rose 0.8% in October following a 1.2% acceleration in September – “Outlook for the new housing market to remain strong in the near term”

Canadian retail sales rose 1.1% to $53.9 billion in September—the fifth consecutive monthly increase since the record decline in April.  – “Rounding out the third quarter, retail sales were up 22.6% compared with the second quarter. In volume terms, retail sales rose 21.5%.”