Week in FX Americas – Carney: No Loonie No More

Thankfully the longest Central Bank goodbye is finally over. Now officially the ex, Mark Carney should be vacating Canada’s Central Bank’s Ottawa building this weekend, handing his key pass over to Stephen Poloz, the new BoC Governor before he makes his way across the pond where he will officially take the reins as the Governor of the Bank of England on “Canada Day” (Nice touch!).

Outgoing BoE Governor, Mervyn King officially presides over his last rate meeting next week. The rest of the Canadian Market can now get back to watching economic fundamentals rather than reading about the first foreign national BoE Governor’s shortcomings in the English press.

On Friday the Canadian economy beat expectations for Q1, growing at the fastest pace in six-quarters, supported by the best exports gain in nearly two-years (+1.5% and five times faster than imports). GDP grew at +0.6%, q/q or +2.5% annually, just beating its largest trading partner’s expansion figure of +2.4%. The market consensus call was for a growth rate of +2.3% where as the BoC had projected a +1.5% expansion in April’s Monetary Policy report. Final domestic demand rallied +0.1% in Q1 (slowest pace in 4-years), as consumer spending and business investment weakened (another global phenomena) while the Harper government spending remained unexceptional.

The loonie remains relatively active in a modest range, predominately pushed by month end requirements and excess oil dollar selling. Short-term dollar resistance remains close to 1.0385-90 with dollar support sub-1.03 at 1.0265-70.

 

WEEK AHEAD

* USD ISM Manufacturing
* AUD Reserve Bank of Australia Rate Decision
* AUD Gross Domestic Product
* EUR Euro-Zone Gross Domestic Product
* GBP Bank of England Rate Decision
* GBP BOE Asset Purchase Target
* EUR European Central Bank Rate Decision
* EUR ECB Deposit Facility Rate
* USD Unemployment Rate
* USD Change in Non-farm Payrolls
* 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
Dean Popplewell

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