The Canadian dollar is mostly higher today. CAD is currently the strongest against the British pound and the US dollar. While the Canadian dollar has sold off for the past two trading sessions, the currency is enjoying a relief rally today. Yesterday, the loonie weakened against the US dollar as the USD surged during US trading hours.
Turning to the latest NAFTA news, the US is upbeat for a quick resolution to the talks while Canada is suggesting that more work is needed. While the US has suggested it has achieved "an agreement in principle", Canadian chief negotiator Steve Verheul said "We’ve got quite a bit of work do yet." According to Reuters, six of the thirty chapters in total have been resolved. Most chapters tend to be resolved towards the end of trade talks. Both the US and Mexico are eager to conclude talks ahead of Mexican presidential elections and US mid-term elections in November. Our short-term outlook on the Canadian dollar is neutral, while our medium-term outlook is bearish.
The USD/CAD exchange rate is currently above 1.2910. The euro is flat against the Canadian dollar, with EUR/CAD currently above 1.590. The pound is down against the Canadian dollar, with GBP/CAD trading above 1.8160.
This is a relatively light week for Canadian economic data. Today is the key day, and we'll see GDP figures later today. Last week, year-over-year inflation was higher than expectations.