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. See our updated Privacy Policy here.

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
Oil - US Crude
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
More View more
Loonie Slides as Canadian Credit Conditions Ease Further in Third Quarter

Loonie Slides as Canadian Credit Conditions Ease Further in Third Quarter

Tzu-Wen Chen, Technical Strategist

THE TAKEAWAY: Overall business-lending conditions in Canada continued to ease in 3Q > Continued easing credit terms for corporate borrowers and small businesses > CAD bearish

The Bank of Canada’s quarterly survey of executives indicated a continued easing in overall business-lending conditions in Canada during the third quarter of 2012. The survey’s balance of opinion fell to negative 15.8 in the third quarter from negative 10.8 the quarter prior, and marks the twelfth quarter of easing credit terms. The median forecast of economists surveyed by Bloomberg News had called for a decline to negative 12.0.

The survey collects information on the business-lending practices of Canadian financial institutions, and in particular, gathers the perspectives of respondents on price and non-price terms of business lending. Readings above zero indicate tightening credit terms while figures below zero signal easing conditions.

Responses to the survey revealed that both price and non-price lending conditions had continued to ease across all borrower categories, most notably for corporate borrowers and small businesses, which saw easing conditions for the thirteenth and eighth straight quarters, respectively. Competition among lenders and from capital markets was considered the underlying factor in the easier conditions. Meanwhile, demand for credit from financial institutions was “modestly positive” during the third quarter.

USDCAD 1-minute Chart: October 15, 2012

Loonie_Slides_as_Canadian_Credit_Conditions_Ease_Further_in_Third_Quarter__body_Picture_2.png, Loonie Slides as Canadian Credit Conditions Ease Further in Third Quarter

Chart created using Market Scope – Prepared by Tzu-Wen Chen

The Canadian dollar continued to decline against the U.S. dollar after the survey results were released. A separate survey published at the same time also weighed on the loonie, as the report showed that Canadian businesses had curtailed their expectations for sales growth, investment and hiring over the next year. At the time this report was written, the USDCAD pair was trading at C$0.9810.

--- Written by Tzu-Wen Chen, DailyFX Research

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

DISCLOSURES