The Canadian dollar has been on the backfoot of late. With a cocktail of the stalling US-China trade war and a fall in the price of oil (Canada’s largest export commodity) standing firmly on top of their worries. This week has started off on a more positive note for the ‘Loonie’. This week will see the released of some key domestic data for Canada and some important speeches which may give an insight into the Bank of Canada’s (BoC) future way path concerning their monetary policies. But issues are still causing problems for the CAD.
US Reluctance to Roll Back Tariffs Cause Pessimism About Trade Deal
Reports from the US-China trade deal suggest that President Donald Trump is reluctant to roll back tariffs, despite earlier rumours that the talks were going swimmingly. Due to this, the global trade optimism has begun to fade. The rally of global stocks and the price of oil has also stalled, which has caused havoc for the CAD. The US crude oil futures prices were down this week at around 0.9% at $57.21 a barrel.
Key Data For Canada Due to be Released This Week That Could Give Some Clarity on Outlook of CAD
Canada has several important reports being released this week, investors are hoping that they will shed some light on the outlook for the CAD. Canada’s inflation report for October is due tomorrow and Septembers retails sales data is due Friday. Both reports could help guide expectations for the BoC interest rate cuts.
The BoC senior deputy governor, Carolyn Wilkins will speak later today, the speech will highlight safeguarding the Canadian financial system. Similarly, Thursday’s speech from Governor Stephen Poloz will outline economic change.
GBPCAD Exchange Rate Rallies on Optimism of Tory Majority
The GBPCAD interbank exchange rate rose yesterday as a result of reports from polls placing the Conservative Party slightly ahead of other parties running for the December election campaign. With the rally, the pairing traded at around CA$1.7133. Furthering the boost to the pound, Boris Johnson mentioned that all 635 Tory party candidates are supportive of his proposed Brexit deal. This gave a boost to the GBP as the chance of having Johnson’s deal passed in the House of Commons would be more likely, thus bringing a higher chance of Britain leaving the EU by the end of January 2020. This is bad news for those on the Canadian side of the exchange rate as the CAD continues to slide following negative trade talk news and falling oil prices.
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