Last week the Canadian Dollar continued its dramatic descent against a basket of major currencies such as the US Dollar and Pound Sterling, as fast-falling oil prices sunk the Loonie, while the US Dollar benefited from similarly sharp losses in the Dow Jones Industrials Average. The Canadian currency is now trading near four-year lows, and there is seemingly little to protect the CAD from further losses.

Last Friday’s Canadian CPI index showed that it fell by the most since 1959 during the month of October, bringing the annual rate down to a 5-month low of 2.6 percent. This decline was led by gasoline prices, but even the Bank of Canada’s core measure of CPI slipped, though the annual rate held steady at 1.7 percent. Nevertheless, the data suggests that inflation in the country is likely to fall below their 2 percent target sooner rather than later, with interest rate futures now close to fully pricing in a full 50bps cut at the BOC’s next meeting in December.

Looking ahead at this week’s data, Tuesday’s release of Canadian retail sales is forecasted to have gained 0.3 percent in September, and excluding autos, retail sales are forecasted to have risen 0.2 percent. Furthermore, the September reading of Canadian wholesale sales surprisingly jumped 1.5 percent, and can sometimes serve as a good leading indicator for the headline retail sales report. As a result, this release has the potential to lead the Canadian Dollar higher, though a disappointing figure and continued falling oil prices could weigh heavily on the Loonie.

All things considered, it may be wise to speak to your dedicated account manager to discuss all options available and secure the best rate of exchange possible.