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Canadian Dollar Fell on Political Uncertainty and Macro Data

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Canadian dollar fell as country awaited election results

The US dollar-Canadian dollar pair, which is inversely related to the Canadian dollar, rose as the markets awaited election results. The political uncertainty made the pair rise to a high of 1.303 on October 19, 2015, before closing the day at 1.302. The pair was also affected by the falling crude prices and Chinese data releases. Some bounce back is expected in the pair if a stable government comes to power after the results. The pair rose by close to 0.79% for the day.

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Chinese GDP numbers fall but beat forecasts

The National Bureau of Statistics published key macro data for China on October 18, 2015. The GDP (gross domestic product) for the last quarter came in at 6.9% against an expected 6.8%. But the number is still the lowest since 2009. The industrial production failed to reach expectations and came in at 5.7%. The year-over-year retail sales came in above forecasts at 10.9%.

Impact on the market

The uncertainty was also visible in the Canadian ETFs, which also saw significant losses on October 19, 2015. The iShares MSCI Canada ETF (EWC) fell by 1.5% on the day’s trade. A similar trend was visible on the Asian market as the iShares MSCI All Country Asia ex Japan ETF (AAXJ) fell by 0.81%.

The Canadian ADRs (American depository receipts) trading in the US markets also followed similar trends. Banking ADRs Bank of Montreal (BMO) and the Royal Bank of Canada (RY) fell by 0.79% and 1.5%, respectively. Chinese retail giant Alibaba (BABA) rose by 0.92% on the back of strong retail sales figures.

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