Canadian GDP: the end of loonie’s consolidation?
Canada will announce its monthly GDP on July 31, at 15:30 MT time.
Canadian dollar is nearly intact
On Friday, the Canadian dollar was nearly intact versus its American rival because Canada’s currency held on to this week's revenues even after data disclosed that the American economy managed to expand at its fastest tempo for almost four years.
The Canadian dollar leapt by 0.1% showing C$1.3061 against the US currency.
For the week, the Canadian dollar found itself on track to tack on by 0.7%. Canada’s currency has been spurred by firmer-than-anticipated domestic data as well as easing of trans-Atlantic trade tensions.
Currently, Canada runs an account deficit, therefore its economy could be affected if the flow of capital or trade speeds down.
This week’s penetration by the currency pair USD/CAD of a soaring trend line since April has set investors up for extra Canadian dollar appreciation over the next weeks.
By the way, Canada is currently in talks with the United States and Mexico to modify the North American Free Trade Agreement. On Thursday, the United States and Mexico made up their mind to step up negotiations on modifying NAFTA. By August they’re expected to come to a compromise on key issues.
Extra upbeat noises on NAFTA could potentially spur expectations for another interest rate lift in October.
The major financial institution has had its benchmark interest rate lifted twice in 2018. Financial markets hope for a greater-than 60% likelihood of an October lift.
Meanwhile, the evergreen buck headed south versus a group of currencies because the firm American data didn’t manage to soothe concerns that trade clashes would appear to be a drag in the second half of this year.
American crude futures lost 1.3% coming up with a reading of $68.69 a barrel. By the way, crude turns out to be the country’s crucial exports.
As for Canadian government bonds, they slumped.
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Main market movements on August 11
The market sentiment improved after the USA reported some decreasing in coronavirus hospitalizations. Gold dropped below $2 000 and the US dollar dipped down, while stocks surged. Let’s have a closer look.
All attention to NZD
The RBNZ will make the monetary policy statement on August 12 at 5:00 MT time!
What drives the market on August 10?
The market has started the week with a mixed sentiment…
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