The Canadian dollar is trading sideways in the Tuesday session. Currently, USD/CAD is trading at 1.3141, up 0.05% on the day. On the release front, there are no Canadian data indicators for a second straight day. Bank of Canada Governor Stephen Poloz will testify before the House of Commons Standing Committee on Finance. In the U.S, CB Consumer Confidence is expected to dip to 136.3 points. On Wednesday, Canada releases GDP and Poloz continues his testimony on Parliament Hill. The U.S will release ADP nonfarm payrolls.
A black October for the stock markets has badly shaken investor confidence, which has translated into softer demand for minor currencies like the Canadian dollar. The currency has slipped 1.73% in October, despite a Bank of Canada rate hike last week. At the forefront of geopolitical tensions is the trade war between the U.S and its major partners, particularly with China. Tensions between the two largest economies show no signs of easing, and the Trump administration continues to threaten further severe tariffs on China. The U.S has also imposed steel tariffs on its two neighbors, Canada and Mexico. On Monday, Mexico’s deputy commerce minister said that Mexico would not sign the new USMCA pact, which replaces NAFTA, unless the U.S agreed to remove the tariffs against Mexico and Canada. We’ll get a look at Canadian GDP for August on Wednesday, which could be a market-mover. The economy expanded 0.2% in July, and the markets will be hoping for a stronger gain on Wednesday.
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