The Canadian dollar is mostly weaker today. The currency is the weakest against the US dollar and the euro. Yesterday, the Canadian dollar strengthened alongside surging crude oil prices. While the currency tends to weaken when traders reduce bets on riskier investments, the loonie benefited as yesterday's "risk-off" moves were accompanied by fears of war in the Middle East. As crude oil is a significant Canadian export, the currency strengthened as a result.
Looking at recent news, NAFTA trade chiefs are expected to meet at the upcoming Western Hemisphere summit in Lima, Peru. While the US was pushing for an announcement at the upcoming summit, the talks have failed to progress sufficiently. Trump has also canceled his trip to Lima. Earlier this week, the three countries began another round of negotiations. Rules of origin related to auto manufacturing remains a significant issue. 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 1.2590. The euro is up slightly against the Canadian dollar, with EUR/CAD currently above 1.5570. The pound is up slightly against the Canadian dollar, with GBP/CAD trading above 1.7850.
This is a light week for Canadian economic data. The Bank of Canada's business outlook survey suggested that most businesses were optimistic regarding future sales. Housing starts for March (225.0k vs. 218.0k expected) were above estimates, while building permits for February (-2.6% vs. 1.3%) were below estimates. Later today, we'll see the new housing price index for February. Last week, changes in employment were ahead of expectations.