The Canadian Economy has now officially lost its financial rock-star mentor, ex-BoC governor Carney. Next Monday, on Canada Day, Mark Carney starts his new role as the new top dog at the Bank of England. He has left the loonie in the capable hands of new governor Stephen Poloz. After five years at the helm, and in some of the most interesting of financial times, the CAD happens to be encroaching on its two-year lows outright.
Early on Friday morning the CAD got a mild boost from its April growth data being on target with market expectations. The +0.1% gain in GDP was mostly driven by the +0.3% gain in the services sector. Despite the headline print being optically positive, analysts note that the underlying reality is suggesting a different story line.
A small percentage of investors expect the loonies’ competitiveness to be called into question in the short term. Currently, there seems to be a “continuing divergence in the Canadian economy away from export competitiveness and towards leveraged consumption.” This is not an underlying positive for the G7 economy. Some of the currency’s weakness should be buffered by the continuing foreign demand for Canadian assets. However, it should not provide strength, it will slow down the weakening trend.
On the last trading day of month and quarter, the market price action, egged on by Fed rhetoric, has managed to take our short dollar stop-loss orders as prices cleared the mid-week dollar highs. Analysts note that despite the daily’s remaining top heavy, the market seems to be building a multi-decade base. For now, the dollar remains better bid on dips and ahead of NFP.
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Week In FX Americas: Loonie Loses Rock Star Status
Published 06/30/2013, 02:02 AM
Updated 07/09/2023, 06:31 AM
Week In FX Americas: Loonie Loses Rock Star Status
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