The Canadian dollar is mostly mixed today. The loonie is currently slightly lower against the US dollar, euro and the British pound. As concerns regarding US crude oil production increase, the commodity is selling off today. Given the strong correlation between the Canadian dollar and crude oil, CAD is slightly weaker as a result. Turning to NAFTA news, the chief US auto negotiator has been called back to Washington for talks with the auto industry according to Bloomberg. As such, rules of origin negotiations will be postponed until Jason Bernstein returns to Mexico City. The current round of talks is scheduled to end on March 5. As we have written in previous editions of the Canadian dollar daily update, Trump's proposed changes to US auto content is the biggest stumbling block for NAFTA negotiations. Canada's proposals were rejected by the US side at previous talks held in Montreal. Thanks to recent weakness in the Canadian dollar, we will downgrade our short-term outlook to bearish and our medium-term outlook to neutral later today.
The USD/CAD exchange rate is currently above 1.2680. The euro is up against the Canadian dollar, with EUR/CAD currently above 1.5640. The pound is flat against the Canadian dollar, with GBP/CAD trading above 1.7710.
This is a fairly light week for Canadian economic data. On Wednesday, we'll see the raw material price index. On Thursday, we'll see the current account and Markit manufacturing PMIs. On Friday, we'll see December GDP figures. The GDP numbers will be watched closely following disappointing December retail sales numbers last week.
As the Canadian dollar runs out of steam, 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.