The Canadian economy shrank in October

Canada's economy shrank surprisingly at the beginning of the last quarter of the year due to strong weakness in the industrial sector and reduced yields of oil and natural gas, according to the official Canadian statistics.
Gross domestic product fell in October by 0.3% to 1.68 million canadian dollars in expectation of stagnation of the Canadian economy compared to September, when it rose by 0.4 percent.
This represents the first reduction of the Canadian economy after four consecutive months of growth and today's data will likely reinforce expectations for its delay at the end of the year after a good rebound in the third quarter, analysts say.
Surprisingly deterioration was due to the greatest degree of decline by 2% in industrial production - the most solidly decrease from December 2013. Extraction of oil and natural gas fell by 2.5%, retreating positions after four months of growth.
Weak construction also weighs on the economic performance of Canada in October it deteriorated by 0.5%, marking the fifth decline in the past six months, the analyst added.

Canadian dollar falls from highs due to lower oil prices

The Canadian dollar fell against its US counterpart on Tuesday, as oil rally ended as a result of profit taking by investors, as the market focused on the meeting of the Bank of Canada this week.
Pair USD/CAD rose by 0.30% to 1.3310. On Monday, the pair reached 1.3235, the lowest level since 21 October.
Oil prices fell on Tuesday to 16-month highs after data showed that the OPEC oil production reached in November another record high.
OPEC last week managed to sign an agreement on the limitation of production, which can reduce the excess of reserves of the world, which was followed by a sharp jump in oil prices, the main part of Canada's exports.
The increase in production before the coming into force in January an agreement to reduce production caused concern that the global excess of reserves can continue in 2017.

USD/CAD has won back losses on strong US statistics

The US dollar has won back losses against the Canadian Dollar on Tuesday and is trading at nine-month highs, supported by upbeat US economic data, while the decline in oil prices is putting pressure on the Canadian currency.
In early US trade, the pair USD/CAD rebounded from 1.3489, the session low, to 1.3527, still down by 0.26%.
The pair was likely to receive support at 1.3420, Friday's low, and resistance at 1.3589, Monday's high and a nine-month high level.
Demand for the dollar as a whole is stored on hopes that the presidency of Trump would increase budget spending, will come to tax cuts and a weakening of the financial regulation, which, in turn, will contribute to improving the economic growth and inflation.
The Canadian dollar remained under pressure as oil prices continue to decline amid concerns of oversupply of world reserves.
Canadian dollar is higher against the euro, with EUR/CAD rose by 0.29% to 1.4516.

ING: The yen will rise to 95, the euro - to 1.15, and the Canadian dollar could drop to 1.38

A verbal intervention by the Ministry of Finance and the Bank of Japan after the rise of the yen is quite possible, but unilateral intervention beyond the level of 100 seems unlikely, say analysts at ING.
According to them there is a risk of collapse of the USD/JPY to 95 amid growing demand for protective assets, which may cause Japanese authorities to strengthen verbal and actual intervention in the currency market.
ING Analysts' forecasts after winning the US presidential election by Trump suggest growth of EUR/USD to 1.15, but any growth will be limited, taking into account that the re-evaluation of the prospects for an increase in interest rates by the Federal Reserve was partially compensated by a concern for the affairs of European exporters.
We can see a sharp movement on the USD/CAD to 1.38, as the global market will avoid the risk, analysts said. There are concerns about the expectations of easing of the monetary policy by the Bank of Canada, taking into account the current uncertainty in the US. All the factors are negative for the Canadian dollar. On the other hand the bank of Switzerland would remain on the market and will closely monitor francs and will resort to actual intervention, analysts said. USD/CHF will follow the dynamics of EUR/USD, they added.

USD/CAD rebounded from lows and won back losses

On Thursday, the US dollar regained ground against the Canadian dollar after the publication of upbeat data on benefits for unemployment in the US, as well as a disappointing report on the volume of permits for construction in Canada.
In early US trade, the pair USD/CAD rebounded from 1.2851, the session low, to 1.2902, gained 0.10%.
The pair was likely to receive support at 1.2818, Wednesday's low and resistance at 1.2934, the high of September 6th.
US Department of Labor said, that the number of initial applications for unemployment benefits for the week ending September 3 fell by a seasonally adjusted 4,000 to 259,000 from 263,000 the previous week. Analysts had forecast for a decline of 2,000 to 265,000.
However, sentiment on the dollar remained fragile after the release of weak employment data in the United States on last Friday, as the expectations for rate rise by the Federal Reserve have lowered.
Also on Thursday, Canada's Statistics reported that the amount of issued building permits rose by 0.8% in July, while they were expected to grow by 0.3%. In June, the volume of building permits declined by 5.3%, the value was revised from the preliminary 5.5%.
But the commodity "Canadian" was supported against the background of rising oil prices, as market participants expect fresh weekly information on US stockpiles of crude oil and petroleum products.
Canadian fell against the euro, EUR/CAD rose by 0.86% to 1.4608.

USD/CAD rising in anticipation of Yellen speech

On Wednesday, the US dollar was higher against the Canadian dollar, as investors are waiting for the speech of Federal Reserve Chairman Janet Yellen on Friday.
At the beginning of the US trade, the pair USD/CAD reached 1.2953, the session high; the pair subsequently consolidated at 1.2932, adding 0.16%.
The pair was likely to find support at 1.2854, Tuesday's low, and resistance at 1.2997, the high of August 12.
Market participants are waiting for the outlook of Yellen's on US economy, after the hawkish comments of other Fed officials in recent weeks and release of protocols of the July meeting of the Federal Committee, which showed that its members still disagree on the need to raise rates this year.
The US dollar was supported after data on Tuesday showed, that the volume of new home sales jumped by 12.4% to 654,000 last month, although the forecasts were for decline by 2.0%.
Investors remain cautious on the eve of speech of the Chairman of the Federal Reserve Janet Yellen on Friday.
At the same time the Canadian dollar remaind under pressure from falling of oil prices on Wednesday.
Canadian dollar rose against the euro, EUR/CAD fell by 0.18% to 1.4572.

CAD - daily note for August 11

The best results after the US dollar today showed the Canadian dollar, unexpectedly and significantly raised in the conditions of strengthening USD. This very remarkable fact is fully explained by the increase in oil prices by 4.5%. Discussions on possible measures to stabilize oil prices caused the increase in commodities, although the talks will take place only at the informal meeting at the end of next month. The probability of changes in production volume is small, but today there weren't no major factors, so even a minimum chance was enough for USD/CAD to fall to its lowest level for the month.