The question on everyone's lips since last week is obviously how far will crude prices fall and more specifically, how much this will affect the CAD. If we base ourselves on the fact that Friday's release of stronger Canadian GDP figures in no way provided any support for the loonie, then everything points to crude prices and the CAD moving in lockstep for some time. The big drop in crude is also reviving concerns that inflationary pressures may dissipate, even on a global scale, should such a context continue. Considering how much danger this represents for the European economy, combined with the comments of ECB President Mario Draghi stating that he is ready to imitate the Fed's bond purchase approach in spite of objections from Germany, then volatility seems like it's here to stay.
We can also wonder if Friday's release of employment numbers on both sides of the 49th parallel will help to spark market interest. The danger is that the stock market risk aspect could be viewed as serious enough to make the Fed deviate from its plan, thereby rendering any indicator relating to the past obsolete. If this were to happen, then OPEC could very well chalk up a victory on its board. Have a great day!
Stéphane Goulet
- Range of the day: 1.1360 - 1.1460