The Loonie traded mixed early in the week, but bounced higher after the latest monetary policy statement from the Bank of Canada. A turn in risk sentiment and a terrible May revision to jobs numbers took the bulls down, but not enough to take away the Canadian dollar’s net positive gains for the week.

Canadian Headlines and Economic data

Monday:

Canada June industrial prices rise on higher energy prices: Statscan flash estimate

Tuesday:

Bank of Canada moves to cap long-term rates as Ottawa pumps up borrowing

Wednesday:

Canadian Manufacturing sales increased 10.7% to $40.2 billion in May following a record 27.9% decline in April

Bank of Canada holds rate steady at 0.25% in first decision under new head Tiff Macklem

Bank of Canada says economy won’t recover to pre-COVID-19 levels until 2022

Interest rates will stay low as Canada faces ‘long climb’ out of COVID-19 hole, central bank says

Despite the arguably negative headlines from the BOC event, the rhetoric within the statement and press conference was somewhat positive on the outlook, that we’ll see a sharp rebound as the country reopens and prolonged, slow recovery after. This is likely why we saw the Loonie rebound on the session, along with a positive boost to global risk sentiment  on positive vaccine news from Moderna and positive earnings numbers from U.S. equities. 

Thursday:

Foreign investors acquired $22.4B of Canadian securities in May, following a record investment of $49.0B in April.

ADP Canada National Employment Report: Employment in Canada Increased by 1,042,900 Jobs in June 2020 – The May total of jobs added was revised from 208,400 to -2,951,400!

Along with the ugly revision to the May jobs numbers, global risk sentiment flipped negative during the U.S. session on a combination of negative U.S. economic data (U.S. Weekly jobless claims rise by more than 1 million for 16th straight week) and geopolitical news (U.S. Weighs Sweeping Travel Ban on Chinese Communist Party Members) to likely add to the slide lower in the Loonie on the session.

Friday:

The slide lower in the Loonie continued into the weekend on Friday, despite the broad market leaning somewhat “risk-on” after positive comments from the Director of the National Institute of Allergy and Infectious Diseases (Dr. Fauci is optimistic we’ll see COVID vaccine breakthroughs by early Fall).