By FX Empire.com
The USD/CAD pair continued to drop on Monday, as optimism EU leaders will reach an agreement to ease the European debt crisis, in addition to the better than expected growth in Chinese manufacturing activities, which eased concerns over the extent of slowdown in China’s economic growth, boosted demand for higher yielding assets, which provided the Canadian dollar with some momentum and pushed the USD/CAD pair to the downside.
The Canadian dollar’s gains though were limited by the worse than expected contraction in European services and manufacturing activities, which raised fears that the euro zone economy could be heading into recession.
Traders will continue to monitor the latest developments from Europe, where more optimism could provide the USD/CAD pair with more bearish momentum on Monday. Nonetheless, the uncertainty remains very high in markets, and that could lead the USD/CAD pair to fluctuate over the coming days. Traders will be eyeing the interest rate decision from the Bank of Canada on Tuesday, where the BOC is expected to leave the benchmark interest rates unchanged.
Tuesday October 25:
Canada will release the retail sales for August at 12:30 GMT, where retail sales are expected to rise by 0.2%, following the prior decline of 0.6%, while retail sales excluding autos are expected to rise by 0.4%, compared with the prior flat estimate.
The S&P/CaseShiller house price index will be released for the month of August at 13:00 GMT, where the S&P/CS 20 city house price index is expected to rise by 0.15%, compared with the prior rise of 0.05%, while compared with a year earlier, the S&P/CS Composite-20 index is expected to decline by 3.55%, compared with the prior drop of 4.11%.
The U.S. Conference Board will release the consumer confidence index for October, where consumer confidence is expected to improve slightly to 46.0 from 45.4 back in September.
The Bank of Canada will announce its decision on benchmark interest rates at 13:00 GMT, where the BOC is expected to leave the benchmark interest rates unchanged at 1.00%.
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