The US dollar edged higher versus the Canadian dollar in the previous session closing just a shade over 1.33. The dollar is advancing versus its Canadian counterpart in early trade on Tuesday, pushing further above the key 1.33 level.
The dollar had the upper hand at the stat of the week and as trading began on Tuesday, thanks to US — China trade deal optimism and upbeat comments from Federal Reserve Chair Jerome Powell.
China’s Global Times, a tabloid run by the Communist Party’s official People’s Daily reported on its Twitter feed that the US and China were very close to a phase one trade deal. The report raised optimism that a deal is coming and soon.
China extended an invitation to US Trade Representative Robert Lighthizer and Treasury Secretary Steve Mnuchin to Beijing for further face to face talks in Beijing. The prospect of a deal is sending the dollar higher.
Today investors will be continue watching US — China trade headlines as well as a slew of US data. US trade balance, homes sales and consumer confidence will all be in focus. Consumer confidence is expected to attract the most attention. Investors will want to see that the US consumer is holding up well ahead of the crucial holiday shopping season. A confident consumer tends to spend more. Analysts are expecting t5he data to show that consumer confidence increased to 127.
Canadian Dollar Sluggish Despite Encouraging Data
The Canadian dollar remained sluggish on Monday amid weak oil prices. West Texas Intermediate traded lower amid a stronger dollar and a lack of catalysts.
The Canadian dollar declined versus the US dollar despite encouraging Canadian data. Wholesale sales rebounded by 1% in September following a 1.2% decline in the previous month. Last week Canadian dollar releases also beast expectations, both manufacturing and retail sales fell by less than expected. Yet the encouraging data is not sufficient to lift the Canadian dollar versus its US counterpart.
Looking ahead investors will focus on Canada’s latest estimates of Current account and GDP on Thursday and Friday respectively.