The Canadian Dollar Pushes Past A Dovish Bank of Canada

The Bank of Canada released its latest pronouncement on monetary policy on the heels of a rapid rally for the Canadian dollar (FXC). USD/CAD was down 5 straight days going into the release of the January, 2019 Monetary Policy Report. Four of five of those days delivered substantial declines. The Bank provided a truncated summary … Read more

The Canadian Dollar Rallies As the Bank of Canada Sheds Caution and Resolves to Get Active

I completely missed how the Bank of Canada (BoC) was deftly tempering its rate hike designs with a claim that the Canadian economy still needs more accommodation. For example, in April’s statement on monetary policy, the BoC said the following (emphasis mine): “Some progress has been made on the key issues being watched closely by … Read more

The Canadian Dollar: The Bank of Canada Keeps Applying the Brakes

Last June, 2017, Senior Deputy Governor of the Bank of Canada (BoC) Carolyn A. Wilkins stepped onto the stage with a surprisingly bullish message about the Canadian economy. This speech set the stage for the BoC’s rollback of “emergency measure” rate cuts that responded to the past collapse in oil prices. At the time, the … Read more

Forex Critical: The Latest NAFTA Scare Reverses for the Canadian Dollar and Mexican Peso

Last week, financial markets were abuzz with rumors that Canada was preparing for the U.S. to exit NAFTA, the North American Free Trade Agreement. No official statement ever emerged and within three trading days the entire impact of the scare reversed. For example, the rumors weakened the Canadian dollar (FXC) significantly against the U.S. dollar … Read more

Canadian Dollar: Record Low Unemployment Boosts the Bullish Case

Last week, I wrote about how economic data overrode the apparent desire of the Bank of Canada (BoC) to apply brakes to the strength of the Canadian dollar (FXC). Friday’s jobs report all but sealed the deal on the bullish case for the Canadian dollar and makes it more likely that the BoC will be … Read more

Canadian Dollar: Economic Data Overriding the Brakes of the Bank of Canada

The Canadian dollar (FXC) is at an interesting juncture. Strong economic data has strengthened the currency but the Bank of Canada (BoC) has applied brakes on currency’s rally. The Canadian dollar weakened in the wake of policy statements in October and December. The last word of 2017 went to the economic data as hot inflation … Read more

Canadian Dollar Weakens Further Despite Earlier Policy Warnings

Central banks are getting pretty good at having it both ways. Despite two rate hikes, one in July and one in September, the Bank of Canada (BoC) has talked its way to a net no change in the Canadian dollar (FXC) versus the U.S. dollar (DXY0). Source: As the chart above shows, the Canadian … Read more

A Closer Look At Lane’s Drive That Weakened the Canadian Dollar

There is nothing like a significantly stronger currency to get central banks to take pause. I cannot recall in recent memory a time where a little known (or under-appreciated?) Deputy Director of the Bank of Canada made a notable impact on the Canadian dollar. Such an event occurred on Monday, September 18th. Deputy Director Timothy … Read more

The Bank of Canada Confirms Easy Money Ain’t Gettin’ No Easier

I greatly under-estimated the confidence of the Bank of Canada (BoC) when I mapped out the possibilities for a currency market that highly anticipated a rate hike from the Bank. In its latest statement on monetary policy, the BoC increased its target for the overnight rate by 25 basis points (bps) to 0.75%. The Bank … Read more

Forex Critical – Canadian Dollar: High Odds of Rate Hike Equal High Impact of Any Disappointment

Going into last week’s report on Canadian employment, currency speculators retreated further from what was a record net short position against the Canadian dollar (FXC) less than two months prior. Source: Oanda’s CFTC’s Commitments of Traders This retreat is occurring in conjunction with a consistent strengthening in the Canadian dollar. For example, USD/CAD peaked in … Read more