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“It may have been a slightly more hawkish tone struck by the BoC at the October meeting than what many on the Street had expected  – but as we pointed out, a lot of good monetary policy news is priced into the loonie,” argue ING analysts.

Key quotes

“So it’s no surprise to us to see USD/CAD trading back above 1.30 this week – although the bigger marginal drivers for CAD weakness have been lower oil and general global risk aversion.”

“As for the week ahead, the focus will be on Aug GDP (Wed) and the Oct Canadian jobs report (Fri). Our economists forecast no change from July in the August growth figure; but at an estimated 2.4% YoY, the growth story is still upbeat as Canada continues to reap benefits from the strong foreign demand.”

“We see the unemployment rate stable at 5.9%. Possible upward pressure should be noticeable in the full-time employment figures. Firms hinted recently in the Bank of Canada’s 3Q Business Outlook survey that hiring plans will be extended. But the typical post-summer dip we see in participation rate could put a ceiling on the availability of labour, slightly dampening employment figures. Solid Canadian data may help to keep a lid on USD/CAD below 1.32 – we would look to fade any move above as it would appear out of sync with relative US/Canadian fundamentals.”