CAD - Canadian Dollar
The Loonie lost ground against the Euro, US Dollar and Pound last week on the heels of global current events. However, Canadian consumer sentiment improved, and financial conditions firmly revamped according to recent reports.
The latest numbers of confirmed virus cases through June 8th started to decline, while deaths rose slightly. May Labor Force Survey results surprised with a net addition of jobs and mobility indicators and restaurant reservations have been recovering.
Looking ahead this week, Tiff Macklem, who recently assumed his role as the new Governor of Bank of Canada, speaks at the House of Commons Standing Committee on Finance in Ottawa on Tuesday.
It will be a challenge to predict a direction for major pairs this week and the rest of the year. The decrease in company revenues and large fiscal response to Covid-19 will impact deficit figures but looser monetary conditions should support growth expectations in the short term.
The “implied volatility” that comes from sophisticated financial instruments (such as options with an expiration in 6 months, around the US presidential election) has been increasing for the AUD/USD and NZD/USD pairs, rising for the eighth consecutive session, the highest in over two months.
According to data from the Commodity Futures Trading Commission for the week through June 9, sophisticated market participants (i.e. hedge funds and speculators) expanded their net-long position on the Euro (the most bullish since May 2018). At the same time, net-long positions on the Yen dropped to the lowest level since March and speculators increased their net-short on the US dollar. Net shorts on the Australian dollar, British Pound, and the Loonie declined.
1.359 - 1.368 ▲GBP/CAD:
1.702 - 1.713 ▼EUR/CAD:
1.529 - 1.539 ▼