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Canadian Dollar Weakens on Lackluster Data; Oil and Stock Markets Improve After Weeks in Decline

Published February 16, 2018
  • The US dollar is near three week lows this morning as US government deficit worries are leading the greenback to its lowest level since 2014; despite this, USD/CAD is moving higher as weak economic out of Canada continues to weigh heavily on the loonie.
  • Month-on-month Canadian manufacturing sales declined by -0.3% versus an expected growth level of 0.2%; lower sales in the petroleum, coal, and food industries were the leading factors in this decline.
  • Canadian foreign securities purchases (the total value of Canadian stocks, bonds and market assets purchased by non-Canadian investors) also came in much lower than expected; a reading of -1.97 billion indicated that foreign investors sold off Canadian assets, completely missing the expected purchase of 19.18 billion.
  • The US residential sector remains strong as data on US building permits beat expectations with a reading of 1.40 million; US housing starts also came in strong with a reading of 1.33 million.
  • Global stocks are set to record their best week of gains in nearly six years as the market continues to recover; US stocks posted their best 5-day run since 2011 as equities regain their strength despite improving bond yields
  • Oil prices are also recording solid gains as the commodity is set to gain 4% this week; a weaker US dollar and reports that OPEC and Russia may seek a long-term alliance are helping prices rise.