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NBC Daily Forex : October 28, 2013

ByThe National Bank of Canada
Published 10/29/2013, 01:04 AM
Updated 05/14/2017, 06:45 AM

At their last meeting, Bank of Canada officials lowered their growth forecasts, draining strength from the loonie. This is good news for many of our clients, who were awaiting a good opportunity to convert their U.S. dollars accumulated in recent previous months. The current context is also favourable for selling forward expected cashflows for the coming months. The Canadian dollar is now trading at its lowest level in the past two months, and further weakness is likely in the cards.

The BoC’s comments also had an impact on domestic mortgage rates. Fixed rates on a five-year term in Canada are down significantly since reaching highs in early September.
For the coming week, investors’ eyes will be turned toward the Fed and the Bank of Japan. It will be interesting to see the impact of the U.S. government shutdown on the bond buyback program, as a growing number of analysts do not foresee a tapering of the program before late spring 2014.

In economic news, we will be monitoring U.S. Industrial Production, Capacity Utilization and Pending Home Sales figures. Corporate earnings will also bear watching closely, with stock markets having an exceptional year so far. Emmanuel Tessier-Fleury

Range of the day: 1.0400 – 1.0485
Industrial Production Sep ( MoM)

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