Tomorrow, the main focus relating to Loonie is report.
As usual, there are two options on the table:
- Positive - USDCAD falls down
-Negative: USDCAD soars up
I don't believe CPI of Canada will be positve.
-Firstly, there are too much bad economic data :
+ Unemployment rate climbs fom 6.8% to 7.1% in one month; this will restrict the purchasing power of Canadians.
+Ivey Purchasing Manager Index ( the main indicator of purchasing power of Canada) fell below 50.
+New Housing Price also down to 1.5% from 1.6%. The dynamic for increasing of CPI of Canada comes from the housing price. Noew Housing price was below the expect, so I think it would transfer to final CPI tomorrow.
+Canada GDP also fell by 0.1% to 0.1%. This indeed big challenge for Canada to maintain development target.
- Secondly, in last BOC Meeting, BOC Governor Poloz said that pressure was just temporary, and he didn't is a big problem for Canada. BOC pays attention mainly on development and labor market than pressure.
Finally, I keep the LONG position of USDCAD to 1.0790
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