CAD Weekly Review (May 11 – 15)

CAD Weekly Review (May 11 – 15)

With a mostly quiet week of Canadian headlines and data, it looks like the Loonie was trading mostly off of risk sentiment flows, ignoring a strong bounce back in oil prices heading into the weekend.

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

Canadian Headlines and Economic data

Monday:

Finance Minister Morneau announces new financial aid program for Canada’s large businesses.
Increased global risk aversion sentiment on rising US-China tensions and fears of a new infection wave was likely the catalyst for the Loonie’s mixed start and general performance throughout the week.

Tuesday:

More fears of a second coronavirus wave sparked risk-off sentiment to push the Loonie down more broadly on this session, but hopes of an economic recovery as countries end lockdown restrictions turn traders to positive sentiment during the London trading session. Risk sentiment swings back to negative to push CAD lower during the US session on the dire pandemic outlook and more headlines of rising US-China tensions.

Wednesday:

Risk-on sentiment during London session on lockdown easing had the Loonie continuing its mixed performance against the major currencies, but it was a quick flip to risk-off sentiment during Fed Chair Powell’s warning of extended economic weakness.

Thursday:

Canada March factory sales slump by the most in over 11 years
Oil charged higher on the session as big production cuts, modest pickup in demand boost hopes the market will move back toward balance

Overlay of CAD Pairs & Oil (Black Line): 1-Hour Forex Chart
Overlay of CAD Pairs & Oil (Black Line): 1-Hour Forex Chart

Friday:

Risk-off sentiment picked up during the Friday session to mix up the Loonie’s performance once again, pushing it higher against the comdolls and Sterling, and falling against the rest.

  Weekly Market Outlook 17-02-20

This shift was likely on a combination of weak economic updates from China, Germany, and the U.S., as well as on negative vibes on U.S.-China relations. (Trump administration moves to cut Huawei off from global chip suppliers)

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