The Loonie was mixed this week as a lack of major news from Canada meant risk sentiment and counter currency flows were the main drivers for its performance against the majors.
Risk sentiment was broadly negative all week to push the comdolls lower against CAD, while Brexit and coronavirus/lockdown fears pushed the European currencies relatively lower this week.
Oil was also a factor as prices dropped early in the week, but overall, the Canadian dollar was able to close out as a net winner on Friday.
Canadian Headlines and Economic data
Oil prices slip on potential Libyan output return, demand concerns – This was likely the main driver for the Loonie’s weak start, as well as traders leaning negative on broad risk sentiment. This continues to be driven by a worsening situation with the pandemic.
No major news on the session from Canada so the Loonie’s positive lean during the U.S. session is likely on broad risk sentiment flows as pandemic fears receded a bit. It’s also likely the reaffirmation of support from Federal Reserve Chairman Powell lifted risk sentiment positively across financial markets for the session.
Broad risk sentiment was on a negative lean (likely sparked by uncertainty on the U.S. getting additional stimulus) and seems to be the main driver of Loonie price action as CAD rallied against the other comdolls while falling against the rest of the major currencies.
Trudeau pledges to create 1 million jobs, make ‘significant’ investment in child care in throne speech – “He also promised targeted support for sectors hit hard by the pandemic, such as travel and tourism, as well as to “identify additional ways to tax extreme wealth inequality,” including by addressing corporate tax avoidance by large digital companies.”