As there has been for economic data releases out of Canada over the last week, the Loonie is primarily being driven the broader USD movement, and oil prices. Geopolitics seem to be the current driver of oil, with progress towards an Iranian nuclear deal, the escalation in the Yemen conflict and Nigeria upcoming elections, all playing a part.
Economic releases out of the US today included Core PCE Price Index m/m, which came in on expectations at 0.1%. Personal Income m/m came in 0.1% above expectations, while Personal Spending m/m came in below the expected 0.3% at 0.1%. Along with this, Pending Homes Sales m/m came in strong at 3.1%, over 6 times the expected o.5%
As for the timing of a FED interest rate hike, it will likely depend on the confirmation that core inflation has stabilized and labor markets continue to show improvement.
For economic releases out of Canada today, we had industrial and raw materials price index which both came in well over expectations. As this is a leading indicator for consumer inflation, this could be good for the Canadian dollar. However, this week’s focus will be the release of January’s GDP released tomorrow, and trade balance numbers on Thursday.
Commodities are down this morning and stocks, and the USDX are up: the DOW is up 1.49%, S&P is up 0.99%, NASDAQ is up 0.73%, TSX is up 0.87%, while gold is down 1.29% at $1,185.20 and Oil back down below $50 at 47.99, down 1.72%.