Canadian loonie under pressure
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
It looks like sentiment toward the Canadian dollar may be shifting.
The loonie, as it is known, by mid-session on Monday was on course to close at its weakest level versus the US dollar since August.
One buck will now get more than one loonie, with parity – and its 200-day moving average – breached again over recent sessions by a sense the Canadian economy is enduring a relatively awkward period.
On Friday data showed a 21,900 fall in employment for January. Consensus was for a gain of 5,000 positions according to Bloomberg.
Meanwhile, the housing market is looking less robust, with starts coming in much lower than forecast last month.
The loonie’s traditionally tight correlation to investors’ perception of global growth prospects has looked very shaky of late. That soft domestic data has counteracted better economic news from the US and, in particular, China.
Traders are now adjusting strategies. The latest data on US forex futures shows net “longs” have been cut back sharply for the second consecutive week, from 24.2 per cent to 19.6 per cent of open interest.
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