CAD Weekly Review (Feb. 3 – 7)

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The Canadian dollar comes out as a net winner thanks to central bank stimulus efforts and positive Coronavirus developments, negating the terrible week for oil prices.

Overlay of CAD Pairs: 1-Hour Forex Chart
Overlay of CAD Pairs: 1-Hour Forex Chart
CAD Weekly Performance from MarketMilk
CAD Weekly Performance from MarketMilk

Canada Headlines and Economic data


  • Canadian manufacturing PMI: 50.6 in Jan. vs. 50.4 in Dec.
  • Global risk sentiment started off positive this week, likely due to the news of stimulative efforts from the People’s Bank of China to support the likely hit China will take due to the Coronavirus outbreak.
  • Unfortunately for Loonie bulls, the positive global risk sentiment wasn’t much help as crude oil prices collapsed on Monday on rising fears the Coronavirus will dampen oil demand:
Overlay of CAD Pairs & Oil (Black Line): 1-Hour Forex Chart
Overlay of CAD Pairs & Oil (Black Line): 1-Hour Forex Chart


  • Risk-on sentiment accelerated on Tuesday, most likely on news that a vaccine for the Coronavirus is ready for testing and further stimulus efforts from the PBOC.  This prompts the Loonie to move more on risk sentiment (i.e., rising against safe havens/low-yielders and fall against the “riskier” currencies).


  • Canada’s merchandise trade deficit with the world narrowed from $1.2 billion in November to $370 million in December
  • Coronavirus could hurt already vulnerable global economy: Bank of Canada
  • Positive risk sentiment driven behavior expanded on Wednesday for the Loonie, possibly related to the news of a breakthrough in the race for a vaccine by a British scientist pushing global risk sentiment further positive.


  • Canadian construction costs for different types of residential and non-residential buildings increased during the fourth quarter, growth ranging from 0.3% to 0.5%


  • Coronavirus related fears sent risk sentiment back to the negative on the Friday session  on news that 41 passengers on a cruise ship quarantined off Yokohama test positive for coronavirus, and concerns the outbreak will do much more economic damage to China than previously anticipated. This reversed the Loonie’s behavior for the week to take a smaller loss against the other comdolls, but remained relatively steady against the rest of the major currencies.
  • Canadian employment increased by 35K (+0.2%) in January, all in full-time work. The unemployment rate fell 0.1% to 5.5%.
  • Canada’s Ivey PMI shows accelerating economic activity in January


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