Last week was one of the wildest weeks in financial market history. As an exporting business all this noise going around immediately affects my business with the changes in the foreign exchange. Strength in the CAD means my goods are more expensive to my customers.
Last week the Canadian dollar remained fairly steady until Friday when news of the massive bailout plan for the US financial institutions caused the CAD to strengthen versus the US dollar. How the US is going to pay for the bailout remains to be seen and this weighs on the US Dollar. Canadian retail sales came out this morning weaker than expected, however, the market appears to be largely ignoring the data so far as the CAD continues to gain strength.
Tomorrow we will see the release of CPI numbers for August but then that is it for Canadian data for the rest of the week. The US data calendar is also relatively light this week so the market will inevitably continue to look toward equity markets for direction. Continued Canadian dollar strength seems likely in the short run.
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