After this morning’s big moves in the Turkish Lira, euro and pound, and the sizeable stock market falls, more volatility is expected in the early North American session.
The mixed-bag U.S. jobs report on Friday caused the dollar to weaken further, allowing the likes of the euro/U.S. dollar and the Aussie dollar/U.S. dollar currency pairs to push higher, while buck-denominated gold also got a boost. The U.S. dollar/Canadian dollar currency pair, meanwhile was hit with a double whammy as it not only fell on the back of the NFP report but the Canadian dollar also got a boost from the stronger Canadian employment figures.
The price of energy surged 8.33% this week. West Texas is trading at $50.75 per barrel in the aftermath of a surprise Organization of the Petroleum Exporting Countries production cut agreement at the group' meeting in Vienna. The shock came for the fact that after working on a similar deal since March of this year, the agreement has faced several public failures when it was only a freeze of production.
Despite crude oil’s massive rally on the back of the OPEC news, the Canadian dollar, which tends to correlate strongly with oil prices, has hardly moved against its major rivals. Indeed, the U.S. dollar/Canadian dollar (USD/CAD) currency pair momentarily turned positive.
Obviously, there will be a lot happening next week from a fundamental perspective and we are expecting to see increased volatility in the financial markets across the board.
The Canadian dollar has been among the weakest of currencies in G10 in recent days. The sell-off has been sparked by the Bank of Canada’s Governor, Stephen Poloz, who on Wednesday said the central bank “actively” discussed the prospects of adding more stimulus into the economy, but in the end decided to keep rates unchanged.
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.
The RBNZ, unlikely to make any changes to interest rates, will be releasing its policy statement three hours after the FOMC publishes its own statement on Wednesday evening.
Another air disaster did nothing to allay fears of possible terrorist activity, even as there has been no positive determination of the cause of Egypt Air flight 804.
