FXStreet (Delhi) – Research Team at TDS, notes that while yesterday’s data disappointment pushed USDCAD towards the 1.3370/80 area, those gains were paired back by the end of the day (which mostly seem to be driven by a rebound in crude oil).
Key Quotes
“Yesterday’s manufacturing sales report was weaker than expected, falling by 1.5% m/m in September. Declines were broadly based as 13 of 21 industries reported lower sales. The volumes metric was just as bad and suggests that monthly GDP will contract in September. At the margin, it also implies that the Bank of Canada’s 2.5% estimate for Q3 GDP growth may be a bit too ambitious.”
“Despite this, the Bank is expected to remain sidelined for the foreseeable future – especially if the Fed begins policy lift-off in December. Nonetheless, the weak data reinforces the notion that Canadian recovery still not out of the woodwork and the CAD will need to remain persistently weak to rebalance the economy.”
“Fair value is in line with spot at 1.3330 but we continue to see scope for upside in funds as the data later this week is expected to be negative (particularly for retail sales).”
(Market News Provided by FXstreet)