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Both the  Canadian dollar and the Japanese yen have been falling. What’s next for both currencies?

The team at CIBC  World Markets:

Here is their view, courtesy of eFXnews:

The following are the weekly outlooks for the CAD and JPY as provided by CIBC World Markets.

Chasing Down the Barrels for CAD:

We previously pointed to the fact that revisions to crude export volumes reported by Statistics Canada tracked figures released from the National Energy Board. And with the NEB releasing data this week, we thought it would be appropriate to take a peek at what they implied for August’s goods trade balance. The NEB figures suggest that crude volumes sent to the US were up by around 1% on the month, with US EIA data also pointing to a gain.

That’s roughly 6% better than what StatCan previously reported volumes doing, and could represent roughly $500 mn of improvement to the trade balance. That’ll add to the positive news coming from our above-consensus call on goods trade for September, and should help stabilize loonie.

NEB vs StatCan vs EIA Track Canadian Crude Shipments

Racing to Keep Up With the Yen

The BoJ turned up the heat even more on the dish of QE it is serving Japan’s economy, saying that the money base would now expand by about ¥80 trillion a year (rather than the ¥60-70 trillion previously). But having failed to stoke exports and with the Yen still not exactly cheap on a long-term historical perspective, it is questionable whether even this would be enough to offset the big drags from fiscal policy the country is faced with this year and potentially next (unless scaled back).

If growth fails to react as expected and/or the BoJ is forced to do even more, the yen could weaken further than we previously projected.

Japanese Monetary Policy Trying to Offset Large Fiscal Drag Yen probably not cheap by historical standards

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