TG: Canadian dollar shoots well above 77-cent mark
The Canadian dollar is well above the 77-cent mark this morning, driven higher by commodities and a fizzle in the greenback.
The loonie was sitting at about 77.30 cents U.S. heading into the North American open.
Resource-linked currencies are generally doing well as certain commodity price climb higher, said London Capital Group chief analyst Brenda Kelly.
But along with that is a dip in the U.S. dollar, pulled lower as investors bet against the possibility of a rate hike by the Federal Reserve this year.
Yesterday’s release of minutes from the last meeting of the Federal Open Market Committee, the U.S. central bank’s policy-making group, helped fuel that speculation.
“With the dollar basket posting a second week in decline, with additional downside likely bolstered by a less-than-hawkish FOMC, the reverse is taking place in the commodity complex,” Ms. Kelly said.
Some analysts are betting on a continued short-term bump in the loonie, though they do see it tumbling again.
You can bet that the campaigning federal parties will be watching this morning for Statistics Canada’s last jobs report before the Oct. 19 election.
You can never bet on what that report will show, though economists project September job gains of anywhere from 6,000 to 14,000. There’s even a projection of a loss of 6,000 positions.
Similarly, some analysts see the unemployment rate holding at 7 per cent, others see it inching down to 6.9 per cent.
“Thanks to the diversified Canadian economy, Ontario, Quebec and B.C. all have a growing number of jobs to offer,” said Laurentian Securities assistant chief economist Sébastien Lavoie.
“The number of jobs vacancies in Ontario is particularly elevated, near 90,000, reflecting the strengthening of non-energy export industries. This healthy labour mibility indicates that the transition to new main engines of economic growth is in progress and in line with the [Bank of Canada’s] base-case scenario.”
Watch, too, for this morning’s release of the Bank of Canada’s third-quarter business outlook survey.
“The Bank of Canada’s fall business outlook survey, compiled in late August and early September, is expected to see broad, if modest, improvement,” said BMO Nesbitt Burns.
“The oil shock significantly dented growth and business confidence in the first half of the year, but that impact should be fading. A weaker Canadian dollar and improving U.S. domestic demand are likely boosting sentiment in most regions outside of the Prairies.”
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