The markets brushed off the events in Washington, as we suggested they would in yesterday’s note. So, after three days of relatively wide fluctuations, the Canadian dollar is right back where it on Monday morning, the first day of 2021 trading. The Canadian dollar could best be described at the moment as looking for direction. The selloff in equities on Monday pushed the Loonie lower at the beginning of the week before strong oil prices and the takeover of the Senate elections gave it a boost in the last couple of days. This morning, a broad rebound in the US dollar has caused the Canadian dollar to trade down a modest 0.3% and we are right back where we started. The economic data has not done much to provide direction to the Canadian dollar either. Real estate in Toronto and Vancouver remains on fire and Canada’s balance of trade for November came in better than October but in line with consensus expectations. The two remaining data points for the week are the Purchasing Managers Index expected later today and December employment figures out tomorrow.
