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Canadian Dollar Quiet, Investors Eye FOMC Minutes

The Canadian dollar is unchanged in Wednesday trading. Currently, USD/CAD is trading at 1.3147, up 0.06% on the day. On the release front, there are no Canadian or U.S events. Markets in the U.S are closed for the Fourth of July, so traders can expect USD/CAD to remain subdued on Wednesday. On Thursday, the U.S releases ADP nonfarm payrolls, unemployment claims and the FOMC minutes of the June policy meeting.

Canada’s manufacturing sector continues to expand. Canadian Manufacturing PMI improved to 57.1 in June, the highest level since the survey started in 2010. The strong numbers are all the more impressive, given the deadlocked NAFTA negotiations and recent tariff spat between Canada and the United States. The Bank of Canada meets on July 11 for a policy meeting, with the odds of a quarter-point hike now at 80%, up from 55% just last week. Canada will release key employment numbers on Friday, and a strong showing could cement a rate hike and boost the Canadian dollar.

The spotlight will be on the Federal Reserve on Thursday, with the release of the FOMC minutes. The minutes could be a market-mover, as investors look for clues about upcoming rate hikes. The June hike marked the second in 2018, and whether the Fed will press the trigger three or four times this year remains a hot topic, as Fed policymakers appear split on the issue. The impressive performance of the U.S economy makes a strong case for four hikes, but the Fed is uneasy about escalating trade tensions as a result of President Trump slapping tariffs on major U.S trading partners.

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