Loonie Falls as Tension With Saudi Arabia Rises

Wednesday, August 8, 2018

 

Political tension with Saudi Arabia is driving the loonie lower as the Saudi’s seem to be planning to dump Canadian assets. This escalation follows suspended passenger flights, removal of diplomats, and a flurry of sanctions. With low volatility and thin trading volumes these geopolitical spats have the potential for meaningful currency moves. Building permits were the lone economic release missing expectation at -2.3% vs. -0.1% est. There are no major releases until Friday’s employment data.
 

The US dollar is quiet versus most currencies this morning. No major economic releases or market moving new releases are driving consolidation within a tight range. Tomorrow’s producer price index releases and Friday’s consumer price index will be good measures of inflation and could drive movement.
 

No news or headlines from the Eurozone is keeping the Euro quiet today too. No top tier economic release from the ECB may leave the Euro vulnerable to technical trading and external drivers over the coming weeks.
 
North American Equities are mixed: The Dow is down 0.25%, the S&P down 0.11%, NASDAQ up 0.13%, and the TSX down 0.13%. Crude Oil is down 2.04% ($67.68) and Gold is down 0.14% ($1,216.60).

 

 

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