USD/CAD Exchange Rate Steadies Despite Positive Unemployment Figures
The US Dollar Canadian Dollar (USD/CAD) exchange rate is rangebound today and is currently trading around CA$1.3371 on the inter-bank market.
The US Dollar (USD) failed to gain on the Canadian Dollar (CAD) today despite the publication of the US continuing jobless claims figures for January showed a better-than-expected decrease at 1.713m against the previous month’s 1.737m.
These were followed by the publication of the US initial jobless claims figure for January which also showed an encouraging decrease, providing some uplift for the US Dollar.
US Dollar traders have remained generally cautious as the divide between President Donald Trump and the House of Representatives continues to show signs of widening after the House Speaker Nancy Pelosi blocked Trump’s State of Union address yesterday.
With the on-going partial US government shutdown nearly into its sixth week, USD traders have remained skittish on any signs that this could continue, as Trump remains resolute on his demand for funding for the Mexican border wall.
Trump tweeted today:
Without a Wall there cannot be safety and security at the Border or for the U.S.A. BUILD THE WALL AND CRIME WILL FALL!
— Donald J. Trump (@realDonaldTrump) January 24, 2019
Canadian Dollar US Dollar Exchange Rate Stabilises Despite Fears that BoC May ‘Flirt’ with Recession
The Canadian Dollar, meanwhile, has failed to recover from yesterday’s publication of the Canadian retail sales figures for November, which showed a worse than expected decrease to -0.9%.
Canadian Dollar investors have remained general cautious, with signs of Canada’s economy slowing down, and Jim Mylonas, a global macro strategist at BCA research, saying:
‘We’re now at the point where the Bank of Canada is going to be flirting with triggering the next recession if it hasn’t already.’
Canada’s on-going fall out with China is also preventing the ‘Loonie’ from gaining, and with its export-heavy economy sensitive to any global political tensions, the CAD/USD exchange rate has failed to rise.
Continuing arguments over Canada’s arrest of Huawei’s executive, Meng Wanzhou, has caused increasing tension between China and Canada, however Canada’s ambassador to China, John McCallum, has recently defended Wanzhou’s case for extradition.
‘One, political involvement by comments from Donald Trump in her case. Two, there’s an extraterritorial aspect to her case, and three, there’s the issue of Iran sanctions which are involved in her case, and Canada does not sign on to these Iran sanctions. So I think she has some strong arguments that she can make before a judge.’
USD/CAD Forecast: ‘Greenback’ Could Rise if US Political Deadlock is Broken over Funding
USD traders will be looking ahead to tomorrow’s publication of the US monthly budget statement for December, with any signs of an increase potentially providing some uplift for the USD/CAD exchange rate.
Tomorrow will also see the publication of Canada’s budget balance figures for November, and with any signs of an increase this could provide the ‘Loonie’ with some much-needed uplift.
Although CAD investors will be looking further ahead next week to Thursday with the publication of Canada’s GDP figures for November.
Next week, meanwhile, will see a raft of US data releases which could see the USD/CAD exchange rate rise on any signs of bullishness in the US economy.
The USD/CAD exchange rate is, however, more likely to driven by political forces into next week, with any signs of let-up between the White House and the House of Congress – over the controversial Mexican border wall funding – potentially allowing the ‘Greenback’ to rise.