The Canadian dollar is mostly higher. The loonie is currently the strongest against the euro and the Japanese yen. Yesterday, the Canadian dollar sold off against the US dollar, despite surging crude oil prices. While WTI prices are 20% higher relative to their previous lows in mid-February, the loonie has been weak nonetheless.
Turning to recent news, President Trump has once again linked NAFTA negotiations with illegal immigration from the Mexican border. In a recent tweet, Trump said "We may make this a condition of the new NAFTA Agreement." While hopes for a NAFTA agreement have been rising, developments relating to the treaty have been fairly volatile. In other news, the Wall Street Journal (paywall) is reporting that Trump is willing to withdraw from NAFTA unless he gets a better deal for American workers.
Looking at the Canadian dollar in more depth, the recent sell-off has been accompanied by rising volumes. This was particularly the case last week, following the Bank of Canada's recent rate hike decision. Accelerating volumes are a troubling sign for the loonie, as it suggests that bears are trading with conviction. Following recent weakness, we have downgraded our short-term outlook to neutral. Our medium-term outlook also remains neutral.
The USD/CAD exchange rate is currently above 1.2830. The euro is down slightly against the Canadian dollar, with EUR/CAD currently above 1.5640. The pound is down slightly against the Canadian dollar, with GBP/CAD trading above 1.7870.
This is a very light week for economic data relating to the Canadian dollar, as no significant data releases are scheduled for this week. Last week, the Bank of Canada maintained its existing interest rates, while suggesting that accommodative policies were set to continue.