canadian-dollar-coins - CAD

The safe haven US Dollar and Japanese Yen extended losses versus major peers in the Asian session, US fiscal stimulus developments lifted the mood in the market.

Gold and silver prices moved mildly higher even as US 10-year Treasuries yields surged above 80 basis points for the first time in over 4 months

Australia’s ASX 200 gained 0.12% and Japan’s Nikkei 225 index retook 23600  as S&P 500 futures climbed higher

Canadian inflation data for September and speeches from European Central Bank President Christine Lagarde and Federal Reserve Governor Lael Brainard are in focus.

Retail Sales Data to Drive CAD

Retail sales and inflation data could drive the Canadian Dollar in the short term. The data comes  after the Bank of Canada’s Business Outlook Survey showed that “business sentiment has improved but remains weak across all regions [and] businesses expect the pace of the recovery in their sales to slow”.

Surprisingly the Canadian Dollar has outperformed the safe haven USD and JPY  despite business sentiment remaining below its average” and manufacturing sales in August dropping 2%

This could be owing to the recent resilience in oil prices this month, in tandem with the .

Nonetheless, the cyclically-sensitive currency clawed back losses stemming from when BoC governor Tiff Macklem hinted towards negative interest rates still being a possibility

That said. the BoC Governor indicated that Canadian policymakers were also becoming more sensitive to the potential impact of negative rates and alternative policies which could mean the central bank hesitates to ease further unless there is a notable deterioration in economic data.