The Canadian dollar is strengthening against the US dollar today, but is either flat or lower against most other currencies. With crude oil prices currently flat, the currency is mostly trading as a function of weakness in the US dollar. In general, commodity currencies (such as the Australian dollar and the Canadian dollar) have been strengthening over the past few weeks. Looking at the latest NAFTA-related headlines, the outcome of the negotiations remains uncertain. Last week, Reuters reported that Canadian and US officials believed that Trump was prepared to walk away from NAFTA entirely. As Trump has the executive authority to pull out of the agreement unilaterally, the outcome of the negotiations are highly unpredictable. While Canadian officials are making preparations for a post-NAFTA world, they may be willing to make concessions in order to protect the country's auto and lumber industries. Our short-term trending indicator is currently bullish, while our medium-term outlook is neutral.
The USD/CAD exchange rate is currently above 1.2420. The euro is up against the Canadian dollar, with EUR/CAD currently above 1.520. The pound is down against the Canadian dollar, with GBP/CAD trading above 1.7080.
Looking at economic data and events this week, all eyes will be on the BoC's upcoming interest rate decision and statement this Wednesday. There are no other major economic releases or events this week. Last week, the Bank of Canada's Business Outlook Survey suggested an upbeat outlook for future growth.
As the Canadian dollar strengthens on higher crude oil prices and rate hike hopes, we are upgrading the currency to bullish 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.