USD/CAD has gained ground in the Thursday session. Currently, the pair is trading at 1.3639, up 0.46% on the day. On the release front, the U.S. unemployment claims rose slightly to 216 thousand, just shy of the estimate of 217 thousand. We’ll also get a look at CB Consumer Confidence, which is forecast to climb to 135.7 points. On Friday, the U.S. publishes Chicago PMI and Pending Home Sales. There are no Canadian releases this week, so U.S. indicators will have a magnified effect on the direction of USD/CAD.
The struggling Canadian dollar has dropped to its lowest level since May 2017. There has been little to cheer about in December, with the currency dropping 2.6 percent this month. In the U.S., the stock markets have been in turmoil, with massive losses on Monday, followed by sharp gains on Thursday. The roller-coaster movement in the markets has raised risk apprehension, making the Canadian currency less attractive, as nervous investors stick with safe-haven assets.
There was a positive development in the U.S- China trade war, following reports on Wednesday that a U.S. delegation would travel to China to hold talks in the first week of January. The ongoing trade dispute between the world’s two largest economies has caused havoc in the equity markets and hurt the Canadian dollars. President Trump has agreed to suspend further tariffs on China while the sides are talking, but has promised more tariffs on March 1 if the sides are unable to reach a deal. A breakthrough might be to tall an order, but the fact that the sides are meeting face-to-face for the first time in months will likely improve the mood of jittery investors.
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