Week in FX Americas – The Loonie Bears Had Their Wings Clipped

The loonie was supposed to weaken this week, only because everyone said so. However, the currency took off in one direction and that was higher.

The bears did get a bit of a reprieve after Friday’s tepid US employment results, but at parity, there is ‘no harm no foul.’ The US jobs report now deflates fears of the Fed pulling back stimulus, supporting both equities and bonds and hurting the greenback somewhat.

It seems that corporate dollar offers have scaled back to 1.0020-50, with decent amounts now reported on top. On the downside, investors should expect bids to begin to appear in ‘dribs and drabs’ starting at 0.9960 and appearing all the way down to 0.97.

Stats Canada get to revise Canadian employment numbers once a year and on Friday they reported that Canada’s job creation was lower than previously thought at the end of last year, although the jobless rate remains at the lowest level in four-years (+7.1%).

The economy only added +31.2k net new jobs in December 2012, less than the +39.8k reported.

No matter what Canada keeps reporting, the pace of job creation remains a surprise to many analysts. Job creation was stronger in the second half of last year. This is certainly a strong reason to be more of a loonie lover than a hater!



* AUD Reserve Bank of Australia Rate Decision
* EUR Euro-Zone Retail Sales
* AUD Unemployment Rate
* GBP Bank of England Rate Decision
* GBP BOE Asset Purchase Target
* EUR European Central Bank Rate Decision
* CNY Consumer Price Index
* EUR German Consumer Price Index
* CAD Unemployment Rate

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.

Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis 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