By TraderVox.com
Tradervox (Dublin) – The loonie has dropped against the US dollar after concerns rose about economic growth in the country is slowing. The country’s exports to the US declined as oil exports dropped last month due to slowing economic recovery in the US, Canada’s largest exporter. The Canadian dollar dropped for the third day as Federal Reserve officials meet to discuss monetary policy where they are expected to extend the twist program.
Dean Popplewell who is the chief strategist at Oanda Corp indicated that the Fed is under pressure to do something proactive otherwise the market will lose risk appetite. At the start of trading today, the Canadian dollar had increased to C$1.0193 but was unable to move beyond the C$1.0200. This will create a triple bottom which has the potential to spur “short-term buying interest” for the US dollar against the loonie. George Davis suggests that this sets up the potential to test the C$1.0268. George Davis is the Chief Technical Analyst RBC Capital Markets in Toronto.
Concerns about Greece exiting the euro zone declined after pro-bailout party won the election; however, concerns about Spain and Italy have continued to dog the market. According to Jeremy Stretch of Imperial Bank of Commerce in London, there are a lot of Canadian data to be released this week which might cause a lot of uncertainty in the direction taken by the USD/CAD pair. There are economists who are predicting that Statistics Canada will provide reports showing a slowing economic growth in the country this week as they release wholesale and retail sales.
It is expected that wholesale sales data will show a decline from 0.4 percent in March to 0.2 percent in April. This has caused the Canadian dollar to decrease against the US dollar by 0.3 percent to CS$1.0243 at the close of business in Toronto.
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