CAD - Canadian Dollar
A gauge of future construction activity came in much higher than expected after April’s poor reflection.
The value of building permits increased 20% in May than they did in April, exceeding expectations and demonstrating a need for new construction. Experts forecasted a 10% increase. It is the first time since March that building permits exceeded the previous month.
The positive news coincided with the relaxed COVID-19 restrictions in Ontario, Quebec and Prince Edward Island. The total value of the issues permits was CAD$7.4 billion and followed declines of 13.4% in March and 15.4% in April. Residential permits were up in six provinces, and reflect homeowners desire to make improvements on their properties. The ripple effect from permits trickles to other purchases, like materials and services to make improvements.
Canada’s GDP data for April is due out Tuesday, and it may provide insight into how the Bank of Canada takes additional steps.
The pound has started the week on the back foot with GBP/USD falling back towards 1.23 and GBP/EUR dropping under 1.10 for the first time since March. The pound is susceptible to risk off moves and with stock markets falling at the end of last week it’s not surprising the pound has taken a bit of a hit. Also, slowly creeping back into the headlines is Brexit with a large gap existing between the UK and EU over the terms of its future trading arrangement. As long as Coronavirus continues to remain under control in the UK, then Brexit will become more of a driver for the pound as we head deeper into 2020 with only just over six months before we are set to leave the bloc with or without a trade deal done.
Equity markets took a hit of late over concerns of the rising number of cases of COVID-19 in the US. The Dow Jones Index dropped over 2500 points through June as investors shifted into more traditional haven assets such as gold and the yen. The euro has held up relatively well, enjoying a semi-haven status with EUR/USD keeping above 1.12 and pushing higher against the GBP too.
1.365 - 1.370 ▲GBP/CAD:
1.678 - 1.691 ▲EUR/CAD:
1.534 - 1.542 ▼