A great deal of volatility is expected this morning as investors will be paying close attention to Canadian and U.S. job creation figures. Analysis of the U.S. data will be difficult given the effects of recent hurricanes Harvey and Irma. Higher-than-expected U.S. figures would further reinforce the U.S. dollar, which has been posting gains against all G10 currencies since the September 20 FOMC meeting.
The figures showing a drop in Canadian exports in August released yesterday morning took their toll on the Canadian dollar, which had a difficult day. The Bank of Canada clearly stated that the next key rate increases would depend on the economic indicators, and the most recent data are hinting at a more accommodating monetary policy than currently anticipated by many economists.
The Canadian dollar and the euro are stable this morning, while crude oil prices remain above the $50/barrel level. The recent weakness of the loonie is an appealing opportunity for exporting companies to place orders on the market and secure their conversion rate for the 2018 fiscal year, which is starting soon.
Emmanuel Tessier-Fleury
Range of the day: 1.2475 – 1.2650