News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bearish
Oil - US Crude
Bearish
Wall Street
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bullish
GBP/USD
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
USD/JPY
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • Heads Up:🇹🇭 Balance of Trade (MAR) due at 03:30 GMT (15min) Expected: $0.6B Previous: $7.25B https://www.dailyfx.com/economic-calendar#2021-04-22
  • RT @FxWestwater: #Euro Technical Analysis: $EURUSD, $EURAUD, $EURNZD, $EURJPY Chart Setups Link: https://www.dailyfx.com/forex/market_alert/2021/04/22/Euro-Technical-Analysis-EURUSD-EURAUD-EURNZD-EURJPY-Chart-Setups.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Westwater&utm_campaign=twr https://t.co/nX…
  • Commodities Update: As of 02:00, these are your best and worst performers based on the London trading schedule: Gold: 0.07% Silver: -0.25% Oil - US Crude: -0.82% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/24SAvh8ude
  • MACD who? The Moving Average Convergence Divergence (MACD) is a technical indicator which simply measures the relationship of exponential moving averages (EMA). Find out how you can incorporate MACD into your trading strategy here: https://t.co/ZNs4Qi8ieG https://t.co/egstowtltH
  • Forex Update: As of 02:00, these are your best and worst performers based on the London trading schedule: 🇨🇭CHF: 0.12% 🇬🇧GBP: 0.09% 🇪🇺EUR: 0.09% 🇦🇺AUD: 0.04% 🇨🇦CAD: 0.01% 🇳🇿NZD: -0.01% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/D9tyhgy0CG
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Silver are long at 90.65%, while traders in Wall Street are at opposite extremes with 71.89%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/YldZ1a7abi
  • Update on #Cryptocurrencies #BITCOIN -2.72% #BITCOINCASH -5.01% #ETHEREUM +5.15% #RIPPLE -4.21% #LITECOIN -0.24% #DOGECOIN -5.15%
  • Tokyo Governor Yuriko Koike asked central government to declare state of emergency -BBG
  • Recessions can devastate the economy and disrupt the fortunes of individuals, businesses, and investors. But economic decline in the business cycle is inevitable, and your trading can be defined by how you respond to crisis. learn how to prepare here: https://t.co/e4CnobJCss https://t.co/EXYkozlj21
  • 🇯🇵 Foreign Bond Investment (17/APR) Actual: ¥906.5B Previous: ¥1715.5B https://www.dailyfx.com/economic-calendar#2021-04-21
Will Canadian GDP Highlight Continued Pressure in Exports?

Will Canadian GDP Highlight Continued Pressure in Exports?

James Stanley, Senior Strategist
Will Canadian GDP Highlight Continued Pressure in Exports?

Fundamental Forecast for CAD: Neutral

To receive James Stanley’s analysis directly via email, please SIGN UP HERE

Canadian economic data of recent hasn’t been very positive; and this makes the Canadian economy like pretty much every other major economy on the planet Earth at the moment, where a lack of growth coupled with continued disappointment in economic numbers is painting a fairly negative picture for near-term economic prospects. However, unlike the rest of the world, Canada hasn’t had the luxury of an uber-dovish Central Bank to continue prodding competitive weakness into their currency in order to keep trade flows afloat.

As my colleague Chris Vecchio and I posited back in January of this year as the CAD sat at 13-year lows, there was a discernable shift in stance from the Bank of Canada. After the election of Prime Minister Justin Trudeau brought grand plans for fiscal stimulus, the BoC and Governor Stephen Poloz were clear in that they were going to take a step back from monetary stimulus measures in order for Mr. Trudeau’s government to embark on implementation of fiscal stimulus.

Of those fiscal measures totaling approximately $12 Billion is the hope for 50 basis points of growth for the Canadian economy. Roughly half of this fiscal stimulus is in the form of child benefits for households, with the Canadian government hoping that Canadians spend this additional cash in order to, eventually; bring inflationary pressure back into the economy. While waiting on this fiscal stimulus to be implemented and to show results, the Canadian Dollar has ripped higher as many other Central Banks have posed dovish stances to weaken their currencies; leaving the CAD exposed to continued capital flows as the BoC continues to be one of the few major Central Banks not actively talking down rates with dovish commentary.

But while waiting for the results of this stimulus to show the paradigm has shifted: Oil prices have risen, and while this is generally a ‘good’ thing for the Canadian economy, this rise in Oil prices has been coupled by a strong Canadian Dollar that has more than offset the benefit of those higher prices. Canada’s trade balance has continued to worsen throughout the year and this is very much against the expectations and plans of Governor Poloz, who had centered his growth narrative on a reversal of the prior negative trend in exports. But, as the Canadian Dollar has continued to strengthen since January, this has made exports less competitive within the current backdrop of near-unanimous dovish Central Banks (FOMC the notable exception); and this has helped to crush Canadian exports at a record clip in the early portion of this year. Continued lag in exports may force the Bank of Canada’s hand before results of Trudeau’s stimulus might begin to show.

We’ll likely hear this addressed at the BoC’s next meeting on September 7th, but for any ‘big’ changes in monetary plans we’re likely going to be waiting for the bank’s next Quarterly Monetary Policy Report to be released on October 19th.

In the meantime, and of particular interest for next week is the delivery of Canadian GDP on Wednesday morning. The expectation is for 1% annual growth and a monthly contraction of -.6% in June. Should this come in below-expectations, we may see markets taking on a stance of weakness in the Canadian Dollar on the expectation that the BoC may get a little more aggressive on policy easing in the coming months.

Due to this high level of opacity in near-term macro trends, we’re instituting a neutral stance on the Canadian Dollar for the week ahead.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES