Expected USD/CAD Range: 1.042 – 1.048

Update: It has been an eventful morning in the markets so far this morning. First, the ECB surprised almost everyone by lowering rates 0.25%. The Euro reacted immediately and strongly and is down over 1% against the loonie at 1.394. Indeed, a moderating of the strong European currency might have been part of Mario Draghi’s strategy. It is now becoming clear now that most developed market bankers have become focused on deflation and keeping their local currencies in check is part of that strategy. It is not quite “beggar thy neighbour” but does feel a little bit of a race to the bottom.

The second surprise of the day was that the US GDP QoQ growth of 2.8% for the third quarter showed …

Expected USD/CAD Range: 1.040 – 1.045

Update: The Canadian Dollar is stronger this morning and trading around 1.0425. The strength is primarily due to US Dollar weakness on the back of strong Euro-zone and UK economic data. Building permits in Canada came in below expectations but Toronto reported strong price and volume growth in real estate. In our view, the market will continue to be in this range until we get employment and GDP figures out the US tomorrow morning.

The Big Picture: Canada’s new central banker is cautiously optimistic about the economy but shows no inclination towards raising rates in the next several quarters. In fact, the low dollar policy being pursued by the bank suggests …

Expected USD/CAD Range: 1.040 – 1.048

Update: The Canadian Dollar is weaker overnight and trading near two months low at 1.044. The market is intently focused on economic data points due out later this week. Either they will reinforce the developing sense that the Canadian economy is stronger than expected as indicated by the GDP figure last month or they will show that the GDP mark was a blip and that our Central Bank is seeing things right in anticipating slower growth. If the economic figures (building permits and employment) are strong, the market will reconsider the negative bias towards the Canadian Dollar. Otherwise, expect the loonie to continue to decline.

The Big Picture: Canada’s new central banker is cautiously optimistic about the economy but shows no inclination towards raising rates in the next several quarters. In fact, the low dollar policy being pursued by the bank suggests …

Expected USD/CAD Range: 1.038 – 1.046

Update: The Canadian Dollar is showing some strength and trading the around the 1.040 level. Some of the strength is attributable to the strength is the Australian Dollar being interpreted as showing improved prospects for commodity-based currencies. The failure of Blackberry to sell the company is dominating the business headlines in Canada but is largely impactful on the exchange rate. US Factory Orders for September are out at 10 AM and will be the main economic data point of the day.

The Big Picture: Canada’s new central banker is cautiously optimistic about the economy but shows no inclination towards raising rates in the next several quarters.  In fact, the low dollar policy being pursued by the bank suggests …