The Canadian dollar is slightly weaker this morning after weakening yesterday. Despite recent strength in crude oil prices thanks to an expected OPEC supply cut extension, the loonie continues to weaken. Looking at news, Reuters reported that TransCanada's Keystone XL pipeline was approved by Nebraska regulators yesterday. Connecting Alberta's tarsands region with US refining capacity has been a long-term goal for Canada, and should result in higher prices for Canadian crude (a boon for the country). Ultimately, the country's goal is to enable crude oil from Alberta to flow directly to a deepwater port in the US.
The USD/CAD exchange rate is currently above 1.2820. The euro is up against the Canadian dollar. EUR/CAD is currently above 1.5050. Lastly, the pound is up against the Canadian dollar, with GBP/CAD trading above 1.6980.
This is a fairly light week for the Canadian dollar in terms of economic data releases. On Wednesday, we’ll see the Federal government budget balance. On Thursday, we’ll see retail sales for September. Last week, the Canadian dollar sold off after meeting CPI estimates.
As the Canadian dollar weakens further, we are downgrading the currency to bearish 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.