The loonie is back in the news today after a run on relatively poor economic data from the Great White North. Canadian retail sales came in at -0.1% month-over-month in July, versus an expected gain of 0.2% m/m. Excluding volatile automobile purchases, sales missed by even more at -0.1% vs. 0.5% eyed.
After recovering ground following a return to levels not seen in over a month below 1.29, the bounce in the British pound/U.S. dollar currency pair appears to have lost momentum at the conclusion of the week following headlines being made by UK Foreign Secretary Boris Johnson that the process of leaving the European Union does not need to take two years once Article 50 is invoked.
The dollar index was a tad lower on Friday, and on track for its worst week for a month after the Federal Reserve trimmed its long-term rate expectations and the Bank of Japan retooled its monetary policy framework.
The dollar fell to its lowest in a week against a basket of major currencies on Thursday as investors sold the greenback following a writedown of longer-term interest rate expectations from the Federal Reserve.
Dollar bullish investors were left empty handed on Wednesday following the Federal Reserve’s widely expected decision to keep U.S. interest rates unchanged. It is becoming increasingly clear that the ongoing global uncertainties have created an unstable financial landscape which continues to keep most central banks cautious.
The U.S. dollar extended losses against a basket of major currencies on Wednesday after the U.S. Federal Reserve left monetary policy unchanged and projected a less aggressive rise of interest rates in coming years.
Risk is on the menu at the start of this new week with stocks, crude oil and commodity currencies all climbing higher, while the dollar is easing back slightly after Friday’s rally. The weaker dollar has also boosted the GBP/USD, which has bounced off the 1.30 handle, and to a lesser degree the EUR/USD.
While the U.S. dollar has turned slightly lower as trading for the new week has commenced, the major currency rebounded and moved significantly higher at the conclusion of last week with this pressuring other major currencies like the Euro and the British Pound.
This is the week we’ve all been waiting for. This is where the Fed meets the seasonal change point. For those of you that don’t know or didn’t quite realize it, all financial markets tend to change direction at or very close to the change of the season. Throw in a Fed meeting and it becomes more interesting. Throw in a Fed meeting in the traditional graveyard for stocks (September) and it becomes even juicer. Add a presidential election and it could be a September to remember.