Without headlines from Canada the Loonie was at the mercy of counter currencies and oil prices for most of the week. We finally did see strong uniform price action at the end of the week thanks to positive Canadian data and shifts in broad risk sentiment.
Canadian Headlines and Economic data
After a choppy start to the week, oil began its fall as the U.S. fiscal package faces tough talks. This was likely a big influence on the Loonie’s uniform move lower during the Tuesday session.
Headache for OPEC as oil market structure signals return of glut – this prompted more pressure on oil, beginning its final descent ahead of the weekend and taking the Loonie lower with it. We also saw a round of negative risk sentiment as the U.S. pumped out a record negative GDP update and disappointing unemployment numbers.
Canadian Real gross domestic product (GDP) grew 4.5% in May, following two months of unprecedented declines – plus a round of positive risk sentiment from the U.S. markets after positive U.S. tech sector earnings likely helped support risk currencies like the Loonie higher into the weekend.