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Canadian dollar down as commodities weaken

Canadian dollar daily update


Canadian dollar daily update

The Canadian dollar is mostly lower today. The loonie is currently selling off against all major currencies except the British pound and the Australian dollar. Yesterday, the Canadian dollar was fairly weak at the outset of the day, but made back most of its losses by the end of the day. Today's USD/CAD trading range is 1.3070 - 1.3390. 

Looking at factors influencing the loonie, there are no significant domestic developments today. Instead, the Canadian dollar is trading as a function of broader developments in financial markets. Thanks to an ongoing sell-off in the Chinese yuan, most commodity prices are weakening today (and especially those highly correlated to Chinese growth such as copper and iron ore). WTI (crude oil) prices are also slightly weaker today.

Turning to the latest NAFTA headlines, President Trump indicated that he may pursue a seperate trade deal directly with Mexico according to Reuters. His comments suggest that Trump may be giving up on a trilateral deal, given the difficulties of coming to a three-way agreement. Yesterday, Trump said that he had "good sessions" with Mexico and Lopez Obrador (Mexico's president-elect). Trump may be warming up to Mexico in order to advance negotiations with Canada. In recent history, Trump has complained that Canadian demands have held up NAFTA talks. Our outlook on the Canadian dollar remains bearish. 

The USD/CAD exchange rate is currently above 1.3210. The euro is up slightly against the Canadian dollar, with EUR/CAD currently above 1.5340. The pound is down slightly against the Canadian dollar, with GBP/CAD trading above 1.7190. CAD/JPY is down slightly, and currently trading above 85.40. 

Date Event Actual Previous
July 17 Manufacturing Sales MoM MAY 1.4% -1.1%
July 19 ADP Employment Change JUN 2.9K
July 20 Inflation Rate YoY JUN 2.2%
July 20 Core Inflation Rate YoY JUN 1.3%
July 20 Retail Sales YoY MAY 1.6%

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