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Loonie Set to React to Poloz Speech, Ontario Election; Oil Prices Up on Venezuela Output Disruption
Published June 7, 2018
The loonie gave up most of its gains against the US dollar yesterday as the USD/CAD rate is back near the 1.2950 handle at the start of the morning. Despite impressive trade balance figures, the Canadian dollar has weakened after US House Speaker Paul Ryan expressed doubts that a new NAFTA deal could be completed before mid-term elections this year.
A Reuters poll of more than 40 foreign exchange strategists showed strong potential for Canadian dollar strength in the coming months; poll participants noted that strong economic growth rates and a continued interest rate hike cycle will help the loonie, however, flagged NAFTA and trade issues as the largest risks.
Ontario’s provincial elections will commence today, with Doug Ford (Conservative) and Andrea Horwath (NDP) in close contention to win the seat of premier. Live results of riding-by-riding winners will roll in at 9:00 PM EST.
Bank of Canada Governor Stephen Poloz is set to hold a conference regarding the Financial System Review in Ottawa today at 11:15 AM EST; analysts will look to see if Poloz offers any monetary policy indications beyond the scope of this conference.
Oil prices moved higher today as supply issues from OPEC-member Venezuela continue to stoke fears of oil supply constrictions. State-owned oil companies have effectively backed out on contracts with buyers as bottlenecks and other issues continue to hinder movement of oil to Venezuela’s ports.