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Comments from the Bank of Canada Governor and early week positive global risk sentiment had the Loonie roaring higher against most of the majors this week.

And despite some pullback by Friday, the Canadian dollar was able to put together a net positive performance, likely with the help of oil’s continued recovery.

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 Chief Says Significant Stimulus Needed to Rebuild Economy – aside from the headline, Poloz also said the Canadian economy is in a position to ‘shake off’ the worst effects of the pandemic. Relative to situations in other countries, this was positive for Loonie bulls and likely supportive of the Canadian dollar.

Tuesday:

Bank of Canada says it can deliver more monetary stimulus if needed

Broad positive risk sentiment (continued recovery hopes and vaccine development news) was likely the driver for the Loonie’s price action on Tuesday as it outperformed the “safe havens” while underperforming against the other comdolls. Oil was rallying as well on the prediction of swift demand rebalance.

Wednesday:

Canada building permits slump 17.1% in April

The broad, sudden move against the majors during the U.S. trading session was likely on a shift in risk sentiment towards negative, this time possibly on geopolitical tensions rising (e.g., U.S. weighs sanctions on Chinese officials, firms over Hong Kong, China approves controversial national security bill for Hong Kong).

Thursday:

Canada’s current account deficit expanded by $1.8B in the first quarter to $11.1B

The Loonie falls on the session despite a general positive risk vibe (which may have stemmed from this session from Europe as the bigger-than-expected recovery fund proposal). There doesn’t seem to be a direct catalyst as the current account numbers aren’t usually a market mover. So arguably, it could be a late reaction to oil weakness earlier?

Friday:

Canada GDP in April fell a record 11% as COVID-19 shutters economy

Prices for products manufactured in Canada, as measured by the Industrial Product Price Index (IPPI), fell 2.3% in April

Oil falls but still set for biggest monthly gain in years

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