USD/CAD: Trade Deal Optimism and Retail Sales Miss Push Greenback to 5-Week Low Against Loonie

The US dollar continued its weekly decline against the Canadian dollar on expectations that President Trump will formally sign an interim trade deal with China as soon as today.

The phase-one trade deal will help avoid further tariff escalation after almost two years of a trade war between the world’s two largest economies.

President Trump also promised that this interim trade deal, that sees China ramp up its agricultural purchases from the United States up to $50 billion per year and enforce intellectual property laws, will be followed by others.

Risk sentiment improved significantly on trade deal optimism and the Conservative victory at the UK elections. Johnson’s overwhelming majority in the House of Commons took away a key risk in the markets and supported risk-flows with the Canadian dollar receiving a bid as well.

Nevertheless, markets can still be vulnerable until we get a formal presentation of the trade deal by the US government, as shown by recent reports that Beijing still has concerns over the value of US agricultural imports.

Although neither the US or the Chinese government commented on the reports, the US dollar gained with the New York open, picking up support at an intraday low of 1.3150 against the loonie. As of 2:45 p.m. London time, the USD/CAD pair traded at 1.3176.

Other economic reports from today include the US retail sales data for November which rose less than expected, although data for October was revised up to 0.4% from 0.3% as previously reported.

November retail sales came in at 0.2% vs forecasts of a 0.5% raise. The change in retail sales excluding automobiles came in at 0.1% in November, while forecasts were set at a 0.4% change. This could see analysts cut back their US economic growth forecasts for the fourth quarter. is a news site only and not a currency trading platform. is a site operated by TransferWise Inc. (“We”, “Us”), a Delaware Corporation. We do not guarantee that the website will operate in an uninterrupted or error-free manner or is free of viruses or other harmful components. The content on our site is provided for general information only and is not intended as an exhaustive treatment of its subject. We expressly disclaim any contractual or fiduciary relationship with you on the basis of the content of our site, any you may not rely thereon for any purpose. You should consult with qualified professionals or specialists before taking, or refraining from, any action on the basis of the content on our site. Although we make reasonable efforts to update the information on our site, we make no representations, warranties or guarantees, whether express or implied, that the content on our site is accurate, complete or up to date, and DISCLAIM ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Some of the content posted on this site has been commissioned by Us, but is the work of independent contractors. These contractors are not employees, workers, agents or partners of TransferWise and they do not hold themselves out as one. The information and content posted by these independent contractors have not been verified or approved by Us. The views expressed by these independent contractors on do not represent our views.