The US dollar extended gains against the Canadian dollar in today’s trade, together with US stock index futures, on news China would cut tariffs on a range of products in 2020.
Beijing announced it will cut tariffs on a wide range of imports, including frozen pork and tech-parts, demonstrating the country’s willingness to reduce trade barriers as it negotiates a trade deal with the United States.
While the tariff cuts are not directly related to the Phase One trade deal between Beijing and Washington, they still demonstrate China’s stance on freer trade. The listed items accounted for around $390 billion of China’s imports in 2018.
In Canada, economic output edged down 0.1% in October, marking the first decline in the last eight months. Market expectations were set for a 0.1% growth. While 13 of 20 industrial sectors posted increases in economic activity in October, goods-producing industries and the manufacturing sector were down by 0.5% and 1.4%, respectively.
Another important economic report that came from the United States today showed durable goods orders declining by 2.0% in November, well below forecasts of a 0.2% rise. This decline in orders has been dragged down by weaker demand from the defense sector and represents the biggest fall since May.
There are no market reports of note from the US and Canada in the days ahead, as banks and most government agencies will be closed during the upcoming holidays. Nevertheless, thinning liquidity may cause unexpected and choppy price-movements in the markets.
From a technical standpoint, the USD/CAD pair was breaking above a daily falling trendline at the time of writing, but yesterday’s high of 1.3181 could act as a minor resistance for bulls.
As of 2:00 p.m. London time, the Canadian dollar traded at 1.3170 against the US dollar — up 0.20% for the day.