Canadian Building Permits – Forex News Trading

Due:
July 8th, 1:30pm BST

Source:
Statistics Canada

Frequency:
Monthly

Period:
July

Prior: 11.6%
Expected: -5.0%
Low: -10.0%
High: 3.0%

Description:
Canadian Building Permits is monthly publication which provides information about the building construction sectors. In addition to data on the number and value of building permits issued by Canadian municipalities, this publication provides information on the average value of dwellings, the number and value of mobile homes, and permits issued for building renovation. Data are presented at national and provincial levels as well as for census metropolitan areas, large urban centers and economic regions.

Summary:
The Canadian dollar has been a relatively neutral currency for the past several months. Recently we have seen increased speculation of a rate cut from the BOC, causing further bearish sentiment on the currency. GDP figures for May missed estimates and showed the fourth monthly contraction. This added to bearish sentiment on CAD. We are now viewing this currency as bearish and any poor data will add to the chance of a rate cut on July 15. On Tuesday we saw CAD weaken as short positions are set heading into the BOC decision. The wider trade deficit on Tuesday also helped weaken the CAD, as did falling oil.

Expected Market Reaction:
The bias is to the downside and we are not looking for any buying opportunities regardless of any positive deviation. We are watching out for a negative deviation below -0.5%, with a number below -10% being very negative for the Canadian economy. Such negative readings will likely prompt further downside in CAD and add weight to arguments for another cut next week.