The C$ weakened on the back of disappointing GDP numbers this morning, stronger commodity prices should provide support keeping the currency within its recent ranges, while the government seems more focused on issues with China and internal ethics conflicts than the economy.
A higher than expected GDP number drove US$ strength yesterday, which has continued overnight. GDP growth was a surprise considering the recent weak economic numbers. A large number of personal spending, price index and manufacturing numbers will be announced today that could surprise. US$ weakness should be bought.
The EUR rally yesterday was short lived and remains weak this morning. Given the internal and/or cross-border political disagreements in Spain, Italy, France, and the UK along with weak economic numbers in Germany the only surprise is that the EUR isn’t lower. Expect any strength today to be as short-lived as it was yesterday.
- Drummond Gill