CAD: Events that may influence sentiment this week - AmpGFX

Greg Gibbs, Director at Amplifying Global FX Capital, suggests that the significant events this week for CAD include a speech by BoC Governor Poloz on Monday in the USA on the topic of trade (sensitive to the US election) and monetary policy.

Key Quotes

“Later on Monday evening the US presidential debate may influence the CAD. Any ascendency in the debate by Trump or criticism of trade pacts, such as NAFTA, may be seen undermining both MXN and CAD.

Oil prices have been more volatile in recent months and are responding to negotiations between OPEC members and Russia over a possible deal to cut output to boost prices.  A possible production freeze has been kicked around since April, but producers have been unable to agree on a deal.  Oil fell back on Friday reversing gains earlier in the week as hopes of a deal rose and faded again.  Prices are firming in Asia on Monday on reports that there may be progress at an informal gathering of OPEC members in Algeria this week.

A deal may help boost oil prices back towards $50 a barrel from around $45, providing modest support for the CAD.  However, a sustained rise in oil prices above $50 might do more to boost the USD and since it would encourage a faster recovery in the USA oil industry that has been the most flexible producer in recent years.

USA Durable goods orders on Wednesday may influence the CAD as much as the USD, since the BoC is anticipating a recovery in USA business investment to help boost non-commodity exports in Canada.

Canadian monthly GDP for July released on Friday will be important for establishing how significant is the bounce back from the Alberta wildfire effects on Q2.”