After rallying to 1.3387, its highest level in over a month, early on Thursday, the Us dollar Canadian dollar exchange rate plummeted just shy of 100 points to 1.3279. The pair held this level for the rest of the US session on Thursday. The pair is holding steady in early trade on Friday.
The US dollar advanced versus most of its peers, but not the Canadian dollar. US — China trade headlines were one again the fixation of dollar traders. Headlines were once again mixed causing risk sentient to seesaw across the session.
Whilst on the one had reports in the South China Morning Post stated that China would not sign a trade deal with Trump if the President signed the Hong Kong bills. The same article continued that Trump was considering delaying tariffs on 15th December on Chinese imports even if there is no deal. Finally, Chinese Vice Premier also said he was confident that a deal could be achieved. The comments show the extent of the contradictory nature of trade headlines, which broadly have a net effect of zero, across a day or a few days.
Trade will remain in focus today. The dollar could also receive a boost from manufacturing and service sector pmi figures.
Canadian Dollar Rises on Hawkish Poloz & Oil Rally
The Canadian dollar strengthen sharply in the previous US session after hawkish comments from Bank of Canada’s Poloz and on rising crude oil prices.
Whilst earlier this week BoC’s Senior Deputy Governor Carolyn Wilkins delivered a speech which appeared to lay the groundwork for a potential interest rate cut. Fast forward a few days and Boc Governor Stephen Poloz, speaking at an event in Toronto, made it clear that he believes that the central bank has got monetary conditions about right. He added that he thought that global conditions had eased. These were taken as a hint for the central banker than the BoC was unlikely to adjust policy anytime soon. Canadian dollar investors pushed back on their expectation of a rate cut, boosting the Canadian dollar.
Alongside the hawkish commentary, crude oil staged an impressive rally as investors digested a Reuters report showing that it was likely that OPEC extended existing oil output cuts until June. The OPEC group is due to meet in December. West Texas Intermediate jumped 1.8% across Thursday’s session, boosting the commodity related Canadian dollar.
Today investors will eye Canadian retail sales.