The Canadian dollar has been performing rather poorly recently. Is it possible for the currency to turn its fortune around this week?
The major event for the loonie (as the Canadian currency is nicknamed for the image of an aquatic bird on the $1 coin) will be the meeting of the Bank of Canada on Wednesday. While most analysts do not expect an interest rate cut, especially after the last weekâs better-than-expected employment data, a dovish policy statement can still hurt the currency.
Other important events include the release of inflation data and the manufacturing sales report. Economists predict slowdown of inflation from 0.6 percent in May to 0.2 percent in June. The core Consumer Price Index is expected to show deflation. As for manufacturing sales, experts predict a small growth of 0.3 percent.
As usually, the Canadian dollar will likely follow moves of crude oil prices. Unfortunately for the currency, things look bearish for the commodity as negotiations between Iran and Western powers about the Iranian nuclear program continue. A successful outcome of the talks will result in an end to sanctions against the Middle Eastern country, allowing it to resume oil export to the West. And this means additional supply to the already oversaturated oil market.
As one can see, fundamentals look rather negative for the Canadian dollar. As a result, further move down is likely.
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