Foreign Exchange Weekly Wrap Up - Sept. 12 - 16, 2016

Steve Brown, Senior Corporate Trader | Stevebrown@vbce.ca

The USD uptrend continued this week with the exception of a minor correction on Thursday after retail sales and industrial production data missed estimates. Oil prices were much more stable this week although prices did fall from $45.39 down to $42.77, finishing the week at $43.23. The CAD was generally weak across the board although it recovered modestly vs. the EUR and the GBP on Friday. USDCAD tested the 1.3248 level – near the high end of the trading range in place since April and managed to close the week just above the 1.3200 level. The GBP was the worst performing currency as the Bank of England indicated a potential interest rate cut at its November meeting.

Weekly Open

Low

High

Weekly Close

USDCAD

1.3048

1.3030

1.3248

1.3208

EURCAD

1.4655

1.4645

1.4873

1.4717

GBPCAD

1.7314

1.7157

1.7522

1.7157

JPYCAD

0.01271

0.01271

0.01297

0.01290

AUDCAD

0.9840

0.9812

0.9926

0.9891

Themes for the week:

*Bank of England interest rate decision: unchanged @ 0.25% *indicates possibility of a rate cut in November – GBPCAD falls nearly 4 cents Thurs & Fri

*U.S. core retail sales: -0.1% (exp. 0.2% / prev. -0.4%) – USDCAD falls from 1.3235 down to 1.3131

*U.S. core producer price index m/m: 0.1% *exp. 0.1% / prev. -0.3%)

*U.S. industrial production: -0.4% (exp. -0.3% / prev. 0.6%)

*U.S. core consumer price index m/m: 0.3% (exp. 0.2% / prev. 0.1%) – better than expected data boosts USD / USDCAD climbs to 1.3248 – near 5 month high

On Tap for Next week:


Wednesday, Sept. 21: U.S. Fed interest rate decision, economic projections, and Janet Yellen speech exp. unchanged at 0.50% *% chance of rate hike to 0.75% - Sept. = 15%, Nov. = 22%, Dec. = 45%

Friday, Sept. 23: Canada retail sales: (exp. 0.4% / prev. -0.8%)

Canada core consumer price index m/m: (exp. 0.2% / prev. 0%)

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