The Canadian dollar was slightly lower on Monday as the post U.S. non farm payrolls (NFP) boost for the dollar kept going strong. A weaker than expected Canadian building permits did the loonie no favour and it was until Organization of the Petroleum Exporting Countries (OPEC) comments about a potential discussion of the output freeze of energy next month that got crude prices to bounce.
The U.S. added 255,000 jobs in July exceeding expectations after adding a revised 292,000 jobs in June. The May employment figures were also revised upward from a horrendous 11,000 to 38,000. The USD gained across the board as employment continues to be the strongest pillar of the U.S. economy. The U.S. non farm payrolls (NFP) report hit all the right notes with job gains, wage growth and small upticks in the participation rate leaving the unemployment rate steady at 4.9 percent but the biggest contribution was easing market fears about the slowdown of the American economy after a soft advanced gross domestic product (GDP). The positive employment data has put the September rate hike from the U.S. Federal Reserve back on the table despite the timing not being optimal because of the U.S. presidential elections.
Residential building permits were down 5 percent in Canada in another sign that housing might be cooling down despite sales numbers and lower rates in the horizon. The biggest markets of Toronto and Vancouver were down as the government is trying to dissuade foreign buyers to inflate prices, but as the loonie weakens Canadian property becomes an attractive destination for foreign buyers.
The USD/CAD lost 0.041 percent in the last 24 hours. The pair is trading at 1.3166 after employment data on both sides of the border was released on Friday. A strong NFP contrasted with a weaker than expected Canadian jobs report. The divergence in employment mirrors the monetary policy gap as the U.S. Federal Reserve is on the verge of hiking rates this year, while a Canadian interest rate hike is looming from the Bank of Canada (BoC).
West Texas rose 2.089 percent in the last 24 hours. The price of energy is trading at $42.52 after some Organization of the Petroleum Exporting Countries (OPEC) are calling for another meeting to discuss an oil output freeze.
After a horrendous start of the year for oil energy prices the sentiment turned when Saudi Arabia and Russia started to send public messages about a possible oil output freeze. The Doha meeting was not a success as Saudi Arabia demanded an all or nothing commitment from OPEC members. Iran who only this year had its nuclear sanction removed is getting back to previous output levels and would not agree to an oil output until it regained the rest of the organization in reaching record high production.
Even though the summit did not reach an agreement between oil producers it managed to stabilize oil prices which then broke above $50 prior to the Brexit vote. The British vote to end the membership in the European Union shook energy markets and started another rapid decline. This time Russia has not been so eager to enter into output freeze talks and it is the worst hit members of the OPEC like Venezuela who are urging other members to reconsider the market share grab through low prices tactics of leader Saudi Arabia.
An informal meeting of OPEC members could come as soon as next month as Saudi Arabia and Iran will continue to pump at record levels. This week will bring little economic data from Canada, but traders should monitor the weekly U.S. oil inventories and the release of retail sales data from the United States on Friday.
Market events to watch this week:
Tuesday, August 9
4:30am GBP Manufacturing Production m/m
11:05pm AUD RBA Gov Stevens Speaks
Wednesday, August 10
10:30am USD Crude Oil Inventories
5:00pm NZD Official Cash Rate
5:00pm NZD RBNZ Rate Statement
5:05pm NZD RBNZ Press Conference
Thursday, August 11
8:30am USD Unemployment Claims
6:45pm NZD Retail Sales q/q
10:00pm CNY Industrial Production y/y
Friday, August 12
2:00am EUR German Prelim GDP q/q
8:30am USD Core Retail Sales m/m
8:30am USD PPI m/m
8:30am USD Retail Sales m/m
10:00am USD Prelim UoM Consumer Sentiment
*All times EDT
For a complete list of scheduled events in the forex market visit the MarketPulse Economic Calendar 
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