CAD - Canadian Dollar
The Loonie and USD/CAD pair started with a choppy session this morning, moving within a range of 33 pips in 1 hour before Powell’s speech in Jackson Hole. On the local release side, core retail sales came in at 0.9 percent, which was better than the -0.1 percent expected. However, according to Statistics Canada, sales in the retail trade sector were essentially unchanged in June. Stronger sales across most sub-sectors were offset by lower sales at motor vehicle and parts dealers and gasoline stations. Excluding sales in these two sub-sectors, monthly retail sales advanced 1.7 percent.
The surprise this morning came from China, which announced that it would impose additional tariffs on a total of $75 billion of U.S. goods in retaliation for President Trump's latest planned levies on Chinese imports. Some of the countermeasures will take effect starting September 1st, while the rest will come into effect on December 15th, according to the announcement from the Ministry of Commerce. This is the same as the timetable the U.S. laid out on China, with 10 percent tariffs on nearly $300 billion Chinese goods. An extra 5 percent tariff will be put on American soybeans starting next month, and a 25 percent duty on U.S. cars will commence on December 15th. The U.S. equity market is dropping along with crude oil, falling over 3 percent this morning and affecting the Loonie.
As we head into Jackson Hole, keep an eye out for central bank speakers. RBNZ Orr has already said, "We can afford to wait," driving the NZD/USD pair higher towards 0.6396 in overnight trading.
In the U.K., according to Bloomberg, currency traders this week seemed to take Prime Minister Boris Johnson's visits with Germany's Angela Merkel and France's Emmanuel Macron well, seeing some light at the end of the tunnel towards getting a deal done and avoiding a hard Brexit. The GBP/USD pair was the best performer during yesterday’s trading session.
In the European Union, one country where a potential stimulus is even more keenly in focus is Germany. The Bundesbank doesn't think Germany needs anything to boost the economy. It also expects another contraction of output in the second quarter. The EUR/USD is falling towards 1.1063 this morning, but market participants should tighten their seat belts because between new tariffs from China and the Jackson Hole event having vital central bankers speeches, it won't be a quiet day this Friday in the FX market in North America.
1.3250 - 1.3400 ▲EUR/CAD:
1.4688 - 1.4857 ▼GBP/CAD:
1.6165 - 1.6362 ▲AUD/CAD:
0.8954 - 0.9058 ▼NZD/CAD:
0.8420 - 0.8576 ▲