Friday February 8th, 2019

After falling almost 2% the last four days C$ is pausing in anticipation of economic numbers that could weaken to lows not seen since mid-December 2018. Given Bank of Canada’s Deputy Governor Lane’s recent comments these numbers take on a heightened importance for clues to BoC’s rate outlook and therefore CAD direction. If these numbers remain as forecast, considering that CAD has fallen so far over the last few days, a rebound today is likely, while weakness will send CAD lower.

The US Dollar is holding recent high’s and is also very quiet after rallying for 5 straight days. Some weakness should be expected today due to indications that trade talks with China appear to be at an impasse. Apparently, these talks have been postponed which is a concern given the March 1st resolution deadline. Further, there are rumours that the Administration is preparing an executive order banning all Chinese telecom equipment over national security issues.

The EUR is holding on recent lows. There is yet no Brexit conclusion and the EU economy remains weak.

Key Economic Numbers:                    Forecast   Previous

CAD Housing Starts (Jan)                      205,000     213,400

CAD Unemployment (Jan)                     5.7%         5.6%

CAD Participation Rate (Jan)                  65.4%       65.4%

  • Drummond Gill