The Canadian dollar is currently mixed after selling off sharply earlier in the week. CAD is currently flat against the US dollar, while trading lower against the euro, the British pound and the Japanese yen. For the past few days, the currency has closely tracked crude oil prices. As crude oil is one of Canada's most important exports, the currency is highly correlated with the price of the commodity as a result. While crude oil weakened earlier this week, it has traded sideways for the past two days. The Canadian dollar has also been flat for the last two trading days.
Turning to NAFTA news, Trudeau said he was "very optimistic" for a "win-win-win" result for all three countries. Speaking on Bloomberg, Trudeau said he offered to speed up talks ahead of Mexican presidential elections later this year. Canada and the US remains at odds over key issues including automotive rules, dairy and Trump's demand for a sunset clause. Our short-term and medium-term outlook remains bearish.
The USD/CAD exchange rate is currently above 1.2950. The euro is down slightly against the Canadian dollar, with EUR/CAD currently above 1.60. The pound is flat against the Canadian dollar, with GBP/CAD trading above 1.8070.
This is a very light week for Canadian economic data. BoC Governor Poloz suggested a more dovish outlook in a speech earlier this week. Later today, we'll see ADP employment changes. On Friday, we'll see Canadian portfolio investments in foreign securities and foreign portfolio investments in Canadian securities. This week's data releases do not tend to have a meaningful impact on the currency. Last week, changes in employment were lower than expectations.
As the Canadian dollar weakens, 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.