Last week the Canadian dollar gained on the majority of other currencies, including reaching three month highs against sterling after falling below the 1.77 mark. Canadian manufacturing sales figures were better than expected, rising a further 2.1% in September following the good news of a back-to-back gain in the monthly jobs report. However, weak oil prices continue to be a hindrance for the Canadian dollar, given its position as a commodity-driven currency. This week, we expect eyes to be on the CPI data released on Friday – previously, this was 0.2%.
The Japanese Yen remains under pressure and still hovers around the sever year low mark, due to increased sales tax in Q3 of this year, causing the economy to contract a huge 7.1% in the second quarter. If growth continues to be weak this week, it would make Japan likely to call early elections in order to prevent a tax hike next year. The focus will remain in Japan this week after growth data released on Sunday came in a long way below expectations. Later on this week we will have the Monetary Policy Statement and Press Conference from the Bank of Japan.
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