The Canadian dollar continues to fluctuate wildly along with overall market sentiment. Yesterday, the loonie opened in North America off 0.5% lower but since then quickly recovered all of that and then some and is now up 1.2% for the week. These days the Canadian dollar simply follows the equity markets which are currently the market’s leading indicator of overall sentiment. The recovery in equities this week so far has been due to (1) technical buying, (2) the announcement of a huge infrastructure plan in the US and (3) an unexpected rise in May US retail sales figures. In Canada a deeper than expected plunge in April factory sales was overshadowed by these broader events. We will be watching CPI numbers closely tomorrow for further indication of the state of the Canadian economy.
