The Canadian dollar is weaker by 0.5% this morning and is the weakest of the major currencies. The move is somewhat unusual given the US dollar index is unchanged and oil is up. There is also no particular domestic economic news on the agenda that could have caused such a move. The Loonie’s decline today is most likely a result of the bank holiday yesterday with the currency giving up some of its relative outperformance yesterday as it resumes full trading. US inflation data this morning was largely in line with expectations. Canada releases October inflation data next week. There are a range of Bank of Canada and Fed speakers scheduled to speak this afternoon. The markets have turned their attention to monetary policy again and will be watching closely for hints of central bank views about the future course of policy. Altogether, the Canadian dollar has now given up nearly 2 pennies off the highs hit earlier this week. As indicated by the Interchange Financial Consensus Forecast, we think this is where the Canadian dollar should be trading in the short term.
