USD/CAD - Loonie Losing Touch with Greenback

The Canadian dollar continues to decline against the U.S. dollar. Market participants focus on the U.S. Federal Reserve next week and the outlook of future interest rate hikes, which could come as early as December. The loonie was unchanged against the pound and the euro heading into the North American open.

The only economic data for the North American session is from the U.S. today. The U.S. commerce department released Gross Domestic Product figures annualized printed at 3.05%, which was better than forecasts of 2.6%. Later, investors will ponder University of Michigan Confidence, which previously published at 100.0 while expectations are for 100.7. WTI Crude oil traded at $52.50 U.S. per barrel just off its high of $52.72 and opens at $52.68.

Outlook for crude is bullish after global oil producers report better than expected earnings. A look ahead to next week shows two central bank interest rate announcements on Wednesday, first being the Bank of England with strategists anticipating a hike of 0.25% and the second is the Federal Reserve with no change on interest rates. Then to wrap up the week we have U.S. job numbers on Friday.

Experts expect a range today of $1.2857 to $1.2943

What a day for the euro yesterday. The European Central Bank left rates unchanged at 0% and its deposit rate at -0.4%, as expected. The market also expected an extension of the stimulus program, but at a reduced rate and the ECB announced a cut to its bond-buying program from EUR 60 billion/month to EUR 30B/month and extended it until September 2018. The surprise was the less-than-aggressive tapering the market was expecting, as ECB President Mario Draghi emphasized that the economy was still reliant on continued monetary policy support and he still has a flexible stance to make further adjustments if needed. This was the dovish tone that sent the euro dropping around two cents. The euro is currently trading at $1.4964.

Investors expect a range today of $1.4935 to $1.5019

No economic fundamentals out of the U.K. this morning leaving the sterling to trade on broader sentiments. The pound had quite a run this week with the help of a weak loonie, as it gained over 3.5 cents. The pound is currently trading at 1.6890.

Traders expect a range today of $1.6847 to $1.6962

The Australian dollar continues to trade lower as it tests a new multi-month low. Political drama and soft domestic data are factors further weighing down on the Aussie today. Prime Minister Malcolm Turnbull’s government lost its majority after the high court ruled that Deputy PM Barnaby Joyce cannot remain in the parliament as he was also a citizen of New Zealand when he was elected. Furthermore, Australian Producer Price Index came in weaker than expected to put more dents in the already weak sentiment around the Aussie.

Oil (WTI): $52.55 U.S. per barrel

Gold: $1,267.27 U.S. per ounce

Silver: $16.65 U.S. per ounce

Copper: $3.0809 U.S. per tonne

Dollar Index: 95.01