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The Canadian dollar saw a lot of green this week despite awful Canadian economic updates, likely riding higher on oil’s recovery and improving global risk sentiment.

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:

Bank of Canada will do its part to support lasting recovery from coronavirus shock – Wilkins

Mixed start for the Loonie but generally in a positive direction, despite global risk sentiment moving negative on a fresh round of global economic news (global factory activity sinks to new lows) and renewed tensions between China and the U.S. It’s likely the Canadian dollar was riding oil’s recover higher as WTI crude rallied 28% from the Monday open to the week’s high print at $27.95.

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

Tuesday:

Canada’s trade deficit widened from $894 million in February to $1.4 billion in March.

Wednesday:

The Loonie steps back during the U.S. session as oil falls on supply glut, and possibly on a shift in global risk sentiment towards negative as geopolitical risks rise (more anti-China commentary from US President Trump and Secretary of State Pompeo)

Thursday:

Canada’s Ivey PMI falls to 22.8 in April vs. 26.0 in March

Global risk sentiment shifts positive likely on the recent theme that more economies were the path to end lockdown restrictions.  Better-than-expected Chinese trade data and more positive news on Gilead Sciences’ COVID-19 drug remdesivir likely played a factor as well.

Friday:

The total value of building permits issued by Canadian municipalities decreased 13.2% to $7.4 billion in March

Positive global risk sentiment, likely a continuation of Thursday’s drivers,  helped the Loonie maintain its net gains for the week, despite Canada losing a record 2 million jobs in April.