CAD At Six Month Low After Fed Rate Speculation

The Canadian dollar was at its lowest level since March on Monday morning, while the greenback strengthened on speculation about when the U.S. Federal Reserve may start to raise interest rates.

The loonie was off 0.04 of a cent to 89.61 cents US following a loss of 1.7 per cent last week.

Markets have generally looked for the Fed to raise rates around the middle of 2015.

The greenback also found support as revised official data on Friday showed the world’s largest economy expanded at an annual rate of 4.6 per cent in the spring — the fastest pace in more than two years. But traders are looking for reassurance that job growth is also showing similar strong advances.

Markets looked for the U.S. government to report that the economy created about 210,000 jobs during September. And it is possible that the disappointing August report will be revised upward.

Canadian job figures for September come out Oct. 10 .

Traders also focused on the latest reading on the health of the Canadian economy. Statistics Canada is expected to report Tuesday that gross domestic product rose 0.3 per cent during July.

A major deal in the energy sector could also prove to be a weight on the Canadian currency in the coming weeks.

via Kitco

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza