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Previewing the events of this week related to Canada, “Things will start off on a quiet note although we have a number of risk events heading into the weekend,” TD Securities analysts note.

Key quotes

“First and foremost is Q3 GDP released on Friday, where TD looks for a 1.8% advance, in line with BoC estimates. Meanwhile, Trump, Trudeau and Lopez Obrador are expected to sign the USMCA in Argentina on the sidelines of the G20. A meeting between President Trump and President Xi will also be closely watched, especially by those at the BoC who have flagged US/China trade tensions as one of the key risks to the outlook.”

“External drivers shift onto the radar screen following a set of murky data last week. The key focus rests on the outcome of this week’s G20 meeting, which is likely to set the tone in broader crossasset markets. The consequence is that risk markets will trade off the outcome of the Trump/Xi meeting, setting up the USD and the broader FX market over the coming weeks.”

“In this regard, the loonie sits as a price taker, owing to a mix of greater cross-asset stress and the spillover from the collapse in oil prices. They both are linked to the end of easy money theme, underscoring CAD’s role as a credit currency as the era of easy money draws to a close. USDCAD HFFV sits near 1.33, which argues that it is mostly trading where it should. We prefer to fade the highs, though suspect that any pullbacks offer attractive levels to re-establish fresh longs.”