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Canadian dollar update – Tuesday November 12, 2019. All eyes on Fed Chairman Powell and BoC Governor Poloz this week.

Currency-Market-Update-Tuesday-1
Albert Edwards
by Albert Edwards on November 12, 2019

CURRENCY MARKET UPDATE

U.S. dollar highlights:

USD under pressure after reduced optimism tariffs will be rolled back. Markets are also preparing for Federal Reserve Chairman Jerome Powell’s speech tomorrow. The Fed has remained dovish and lowered interest rates three times already this year, however, inflation still remains below the 2% target. Consumer Prices increased only 1.7% in September (versus 1.8% expected).  Retail Sales also improved 4.1% year over year in September as the economy continues to show signs of improvement and strength.

Canadian dollar highlights:

CAD weaker and vulnerable after last’s week’s employment data disappointed. The Canadian economy lost 1,800 jobs last month (versus 14,300 gain expected) and this was the first decline in three months. Crude inventories increased to 7.9 million barrels and oil prices remain stable. Bank of Canada Governor will speak on Friday and markets are anticipating a dovish and patience stance. CAD has been dependent on trade developments and affected by geopolitical events.

Euro highlights:

EUR lower after the Spanish elections created more political turmoil. Growth Rate for Q3 expecting 0.2% expansion monthly and 1.2% year over year.  After the European Commission lowered GDP forecasts for the next two years, EUR remains vulnerable. Manufacturing continues to suffer from trade conflicts and increased geopolitical tensions. Consumer Prices for October also available on Friday.

British pound highlights:

GBP weaker as the economy grew at the slowest annual rate since Q3 2010. A global slowdown and Brexit delayed caused slow business investment and manufacturing. After contraction in Q2, the economy rebounded to provide some support for GBP. Unemployment Rate for September expecting 3.8% today.

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