The Canadian dollar is strengthening today against all major currencies except the euro. As the US dollar resumes weakening, commodities and the euro are broadly strengthening. Looking at economic data, Canadian dollar traders will be watching upcoming GDP growth numbers. While economic data from Canada has been surprisingly encouraging in recent weeks, GDP growth has mostly disappointed. As Canadian growth was fairly high at this point last year, year-over-year growth rates are likely to keep trending down (thanks to base effects). Looking at the latest NAFTA headline, Prime Minister Justin Trudeau does not believe that Trump will pull out of NAFTA. According to CBC reports, Canada has multiple contingency plans in the event that NAFTA collapses. Specifically, Trudeau claims that Canada has considered a "broad range of scenarios". Our short-term and medium-term outlook on the currency remain bullish.
The USD/CAD exchange rate is currently above 1.2280. The euro is flat against the Canadian dollar, with EUR/CAD currently above 1.5290. The pound is down against the Canadian dollar, with GBP/CAD trading above 1.740.
This is a fairly light week for economic data relating to the Canadian dollar. Later today, we’ll see November GDP growth figures. We’ll also see industrial product prices and raw material prices. On Thursday, we’ll get the Markit manufacturing PMI. Last week, retail sales missed estimates while headline inflation met estimates.