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The Canadian dollar closed out Friday as a big net loser thanks to negative risk sentiment pushing higher-yielding currencies and oil prices lower for the week’s session.

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:

Canada’s Housing starts in May was 196K, down from 198K starts in April

Consumer Sentiment Ticks Up for a 6th Straight Week in Canada

Oil prices rise during the Asia session on OPEC+ cuts, record China imports, but later reverses to the downside as Gulf ends voluntary curbs. 

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

Tuesday:

Canadian corporations reported net income before taxes of $74.3 billion in the first quarter, on a seasonally adjusted basis, down $46.5 billion from the fourth quarter of 2019.

A broad move lower in the Loonie during the London session, possibly off of weaker-than-expected European trade data (e.g., German Exports in April 2020: -31.1% on April 2019) or geopolitical tensions (North Korea cuts communications with South Korea, Pompeo demands Iran release US detainees, urges Libya ceasefire)? But during the U.S. session the Loonie turned higher a bit, possibly on rising risk-on sentiment after the WHO’s makes a U-turn on asymptomatic transmission.

Wednesday:

No catalysts from Canada on the session, but the Canadian dollar shifted lower during Asia and London trade before picking up speed after a dovish outlook on the economy from the Federal Reserve. This event sparked a broad shift negative in global risk sentiment, taking down oil prices as well.

Thursday:

Loonie weakness continued into the Thursday session off of the FOMC event and falling oil prices. Negative global risk sentiment accelerated during the U.S. session, likely on fears of a second wave (Florida Reports Highest Daily Increase in Coronavirus Cases Since Outbreak Began) are added on top of the Fed’s dismal outlook to worry about.

Friday:

Canadian industries operated at 79.8% of their capacity in the first quarter, down from 81.4% in the previous quarter.

Positive global risk sentiment recovers during the Asia and London trading sessions (possibly profit-taking?) to lift the Loonie a bit, but swings back to negative later to secure the Loonie’s net loss for the week as fears continue to rise of a second wave and a re-implementation of lockdown protocols (CDC warns U.S. may reimplement strict coronavirus measures if cases go up ‘dramatically’).