Canadian dollar gains lagged those of the G-10 majors once again.
Soft oil prices played a role, as did expectations of slowing domestic economic growth because of the second-wave of the pandemic. Many regions in Ontario, Quebec, and Manitoba are under government-imposed lockdowns, which puts Canada on a worse footing than Australia and New Zealand.
The Joe-Biden-or-Donald-Trump narrative is not helping Canadian dollar sentiment either.
Yesterday’s Federal Open Market Committee (FOMC) meeting came and went, almost without notice. Nothing changed. The FOMC released the identical statement from its September meeting.
It is employment report day in Canada and the U.S. Arguably, the Canadian data will have a more significant impact on the Canadian dollar than the American report. That’s because the Fed said that U.S. rates will remain unchanged until at least 2023, and today’s report won’t do anything to change the outlook.
The Canadian data is more important. The Bank of Canada may act adding additional stimulus if sharply weaker Canadian jobs data, suggests a steeper economic slowdown. Better-than-expected data should not be a factor, as recent lockdown measures suggest the next report will be soft.
Rahim Madhavji is the President of KnightsbridgeFX.com, a Canadian currency exchange that provides better rates than the banks to Canadians
