CAD continues to fall into this mornings’ session, due to bearish comments from Deputy Governor Lane, despite on-going commodity strength. CAD dropped when Bank of Canada Deputy Governor Lane announced that he supports a weaker currency to stimulate growth. Lane blamed CAD weakness on US Fed rate hikes, US trade policy and slowing Canadian growth. Given Lane’s policy comments the market can expect any CAD strength to be short-lived, unless there is a much strong rally in commodity prices or better economic numbers.
The USD is stronger against all currencies, not just CAD. USD has rallied for five straight days, so a little weakness today shouldn’t be a surprise. The US economy is not strong, but it’s stronger than most other economies and China talks are hopeful. Overall, indicators have been mixed, but employment and retail numbers have been particularly strong, which makes today’s Jobless Claims number important to watch. If Claims are below consensus USD will rally further.
The EUR continues to fall. The latest German economic numbers are particularly weak hampering the European Central Bank’s rate increase policy, along with continued Brexit uncertainty.
Key Economic Numbers: Forecast Previous
US Jobless Claims 221,000 253,000
- Drummond Gill