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It was a choppy week for the Loonie, influenced mainly by counter currency flows and risk sentiment. Oil had a solid week higher, which may have offset mostly disappointing Canadian economic data and dovish commentary from Bank of Canada officials.

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:

During the Asia session, we saw global risk-off sentiment thanks to rising coronavirus cases headlines (Beijing Locks Down Part of City After Virus Outbreak at Market) and weaker-than-expected Chinese data to push the Loonie lower against the safe havens and higher against the comdolls, typical behavior during broad risk aversion environments. This behavior reversed during the U.S. session as risk sentiment shifted towards positive after better-than-expected U.S. economic data (Empire State index shows stable conditions in June after two months of record declines) and an announcement from the Federal Reserve that they will start buying individual corporate bonds.

Canadian Manufacturing sales fell by a record 28.5% to $36.4B in April, following a 9.8% decline in March.

Canadian home sales rebound by a record 56.9% in May: CREA

Tuesday:

Foreign investment in Canadian securities reached a record-high of $49.0 billion in April, all in debt securities.

Macklem Says Long Way Out of Deep Hole for Canada’s Economy

IEA: Oil demand set for record bounce next year. Oil prices picked up during the London / U.S. session as seen below, likely the reason why we saw a near uniform move higher in the Loonie against the majors to close out the Tuesday session.

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

Wednesday:

Canadian Consumer Price Index (CPI) fell 0.4% on a year-over-year basis in May, down from a 0.2% decline in April.

Canadian home prices rise in May but cracks appear in underlying data

Thursday:

ADP Canada National Employment Report shows an increase of 208K jobs from April to May

New Canadian house prices edged up 0.1% at the national level in May following no change in April.

Canadian wholesale sales volumes dropped 21.5%, a record monthly decline, to their lowest level since September 2009.

Risk sentiment flipped negative during the U.S. session, which is likely why we saw the Loonie fall against the safe havens, possibly a reaction to weaker-than-expected U.S. unemployment data and rising coronavirus cases headlines.

Friday:

Canadian retail sales were down by just over one-quarter (-26.4%) in April to $34.7B and have fallen by one-third (-33.6%) since physical distancing measures were implemented in mid-March.

Volatility for the Loonie picked up quickly on not only Canadian data and oil prices, and once again on coronavirus fears, this time off of news that Apple will close some stores again in states that are seeing a resurgence of Covid-19 cases.