USD/CAD has posted small losses in the Friday session, after jumping some 1.6% on Thursday. Currently, the pair is trading at 1.3605, up 0.01% on the day. On the release front, there are no Canadian releases. In the U.S., today’s key event is Chicago PMI, which is expected to slip to 61.4 in December, down from 66.4 a month ago.
The struggling Canadian dollar managed to hold onto its own this week, as the Christmas break gave the currency a badly-needed respite. USD/CAD has jumped a staggering 7.8% since mid-November, as turmoil in the equity markets has soured risk appetite and steamrolled risk currencies like the Canadian dollar. The volatility in U.S. markets has been especially pronounced this week, as stocks plunged on Monday, only to rebound with a 2-day rally late in the week. Another factor hurting the Canadian dollar, which is sensitive to commodity prices, is the sharp drop in oil prices. WTI crude, which is currently selling at $44 a barrel, has plunged 39% in just three months. The Canadian dollar has posted six straight weekly losses until Christmas week, and there’s a strong likelihood that the downward spiral will continue into January.
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 commodity currencies like the Canadian dollar. 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 too tall an order to expect, 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.
Written by Admin
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