Week in FX Americas – Bank Of Canada Pushes Rate Hikes Further Out The Curve

Canada’s weak growth in the second-half of 2012 has finally shown up in the job numbers. January’s employment decline (–21.9k) follows on the heels of five-months of stellar job reporting. The data was only one of a “negative data hat trick” reported in Canada yesterday.

Canadian January housing starts also happened to collapse (+161k vs. +196k). The only bright headline was the Canadian trade balance improving (–0.9b vs. –1.9b), but for the wrong reasons. The import figure fell –2.8%, which suggests that domestic demand, may have gone walk-about.

Digging deeper into the employment numbers, wage inflation is a non-issue as average hourly wages for permanent workers has regressed to 2011 levels. This would suggest that any tightening by the Bank of Canada will occur well after the new Governor of the Bank of England has finally left his Canadian duties. For the average investor, a +7% unemployment rate looks good for the time being!

 

WEEK AHEAD

* CNY New Yuan Loans
* USD Consumer Confidence
* GBP Consumer Price Index
* USD Advance Retail Sales
* JPY Nominal Gross Domestic Product
* JPY Bank of Japan Rate Decision
* EUR German Gross Domestic Product
* EUR Euro-Zone Gross Domestic Product
* USD U. of Michigan Confidence Survey

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

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Dean Popplewell

Dean Popplewell

Vice-President of Currency Analysis and Research at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell