The Bank of Canada Puts the Loonie in the Spotlight

Earlier in the Day:

It was a busy start to the day on the economic calendar this morning. The Kiwi Dollar and the Aussie Dollar were in action in the early hours.

For the Kiwi Dollar

In September, New Zealand’s trade deficit widened from NZ$2,139m to NZ$2,171m. Year-on-year, the deficit widened from NZ$2,940m to NZ$4,090m.

According to NZ Stats.

• September marked a 3^rd successive month of record imports, leading to a record trade deficit.
• Total merchandise goods imports surged by 30% (NZ$1.5bn) compared with September 2020.
• Exports rose by a more modest NZ$387m.
• The surge in imports reflected higher prices and strong demand for capital goods including machinery used in construction and passenger vehicles.
• Exports of milk powder, butter, and cheese had the highest value for any September month since 2013. In September, exports of milk powder, butter, and cheese jumped by 17%.

The Kiwi Dollar moved from $0.71606 to $0.71601 upon release of the figures. At the time of writing, the Kiwi Dollar was up by 0.01% to $0.7164.

For the Aussie Dollar

In the 3^rd quarter, the annual rate of inflation softened from 3.8% to 3.0% versus a forecasted 3.1%. Quarter-on-quarter, consumer prices increased by 0.8% after having risen by 0.8% in the quarter prior. Economists had forecast a 0.8% increase.

According to the ABS,

• Prices for new dwellings (+3.3%) and automotive fuel (+7.1%) supported consumer prices in the quarter.
• The CPI’s automotive fuel series reached the highest level in its half-century history.

The Aussie Dollar moved from $0.7511 to $0.75252 upon release of the figures. At the time of writing, the Aussie Dollar was up by 0.43% to $0.7533.

For the Majors

At the time of writing, the Japanese Yen was down by 0.01% to ¥114.150 against the U.S Dollar.

The Day Ahead

For the EUR

It’s a relatively quiet day ahead on the economic calendar. German consumer sentiment figures will be in focus ahead of the European open.

With little else to consider ahead of Thursday’s ECB policy decision, expect plenty of interest in the numbers.

At the time of writing, the EUR was up by 0.07% to $1.1604.

For the Pound

It’s a quiet day ahead on the economic calendar. There are no material stats due out of the UK to provide the Pound with direction.

While there are no material stats to consider, the UK’s Autumn Budget will be key on the day.

At the time of writing, the Pound was up by 0.01% to $1.3768.

Across the Pond

It’s a busier day ahead. Core durable goods and durable goods orders are due out along with trade data for September.

Expect core durable goods orders for September to have the greatest impact.

At the time of writing, the U.S Dollar Spot Index was down by 0.05% to 93.906.

For the Loonie

It’s a quiet day ahead for the Loonie, with no material stats to provide direction.

While there are no material stats for the markets to consider, the Bank of Canada is in action later in the day.

With inflationary pressures persisting, the markets will be looking for the Bank’s outlook on interest rates and the economy.

At the time of writing, the Loonie was up by C$1.2388 against the U.S Dollar.

For a look at all of today’s economic events, check out our economic calendar.