Daily Afternoon Report 06.06.2017

The Canadian dollar was almost unchanged against its U.S. counterpart on Tuesday as investors shrugged off weakness in oil prices as they awaited remarks by Bank of Canada Governor Stephen Poloz and other looming risk event later in the week.

USD/CAD was trading at 1.3469 by 09.44 ET, almost unchanged for the day.

Prices for oil, one of Canada’s major exports, were lower for the third day in a row amid fears that a political rift between Qatar and several Arab states, including Saudi Arabia, could undermine an OPEC-led push to curb a global supply glut.

Investors remained wary ahead of the Bank of Canada’s financial system review, set for Thursday, which was to be followed by a press conference with Poloz.

Investors are keen to hear the central bank’s assessment of the health of the housing and mortgage market in light of a recent run on deposits at embattled alternative mortgage lender Home Capital.

Data on Monday showed that new listings of Toronto homes surged in May from a year earlier, while sales dropped sharply and price gains moderated in the wake of new housing rules aimed at cooling the housing market in Canada’s largest city.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.19% at 96.59 after falling to an overnight low of 96.49, the lowest level since November 8.

The greenback came under pressure ahead of former FBI Director James Comey’s testimony to a Senate committee on Thursday.

Investors are fearful that the Trump administration may be further damaged by any revelations that could emerge when Comey testifies about Russia’s alleged involvement in the U.S. election.

The dollar was already on the defensive after last Friday’s disappointing U.S. jobs report.

Most analysts believe the poor data will not stop the Federal Reserve from raising interest rates at its meeting later this month, but most market participants now expect a more dovish path in the second half of the year.