The Canadian dollar is giving up some of its gains this morning, particularly against the US dollar. USD is currently rebounding and is now no longer looking oversold. Crude oil is also weaker this morning, after WTI and Brent rose to 3-year highs yesterday. Today is a critical day for the Canadian dollar given the importance of upcoming economic data. We'll see both employment figures as well as trade balance numbers. Strong employment figures should support optimism for further rate hikes at the BoC's upcoming meeting. Looking at trade balances, Australian figures announced earlier today were much worse than expected due to a slowdown in coal exports. Given crude oil pipeline issues in late 2017, Canadian exports figures are also at risk. Our medium-term outlook on the currency remains bearish.
The USD/CAD exchange rate is currently above 1.25. The euro is flat against the Canadian dollar, with EUR/CAD currently above 1.5060. The pound is flat against the Canadian dollar, with GBP/CAD trading above 1.6910.
This week's economic data releases relating to the currency includes unemployment data and trade balances. Markit manufacturing PMIs were higher than the previous print (54.7 vs. 54.4 prior). Today is the big day, and we'll see unemployment, changes in employment as well as trade balances. We'll also see Ivey PMIs for December. Prior to the holidays, October GDP growth data missed expectations by a wide margin.