The Canadian dollar remains weak and is trading flat this morning. As the currency has been tracking crude oil prices in recent days, the Canadian dollar has been selling off. Following the start of the latest round of NAFTA talks, the increasing likelihood of the US scrapping the deal is also weighing on the currency. Looking at the economic calendar, CPI and Core CPI numbers set to be released on Friday could have a significant impact. If inflation remains weak, the odds of future Bank of Canada rate hikes will fall further.
The USD/CAD exchange rate is currently above 1.2760. The euro is down against the Canadian dollar. EUR/CAD is currently above 1.5020. Lastly, the pound is up against the Canadian dollar, with GBP/CAD trading above 1.6820.
This is a fairly light week for Canadian economic releases. On Friday, we’ll see CPI and Core CPI numbers. Last week, housing starts and new build permits beat expectations while the Bank of Canada remained “cautious” in its outlook for future rate hikes.
As the Canadian dollar rebounds thanks to strengthening crude oil prices, we are now neutral on the currency in the medium-term. Looking at a weekly chart, the currency is trading within normal conditions. This is based on various technical indicators on the Canadian dollar currency index.