Headwinds keep building against the looney

Last week, oil reached a multi-year low price, with Canadian crude taking a particularly strong hit. The effects of the oil shock most likely will continue to ripple through the Canadian economy, putting pressure on the central bank to ease monetary conditions in the months ahead, with only half of a cut priced-in for the rest of the year.

"With global demand flattering and commodity prices falling we remain bearish on the looney, especially after the recent developments in China, which should weigh on commodity currencies," says Barclays.

Against this backdrop, this week data will test the projections of BoC. On Friday, June retail sales will allow assessment the strength of the Canadian consumer. The same day, CPI data will be released.  A better-than-expected print would relieve some of the easing pressure that BoC is facing.