USD/CAD is Dormant on Christmas Day

USD/CAD is moving in a sideways trend on Wednesday, though it still follows the rally that took off on December 18. The pair is barely fluctuating, with volumes showing minimum levels. Currently, one US dollar buys 1.3167 Canadian dollars, up 0.01% as of 3:25 PM UTC. Both the US and Canadian markets are closed on Christmas Day.

The American currency has been rallying since mid-December on increased optimism around the phase one trade deal between the US and China.

Yesterday, US President Donald Trump said that he and his counterpart Xi Jinping would have a signing ceremony to ink the interim trade deal that had been agreed earlier in December. Trump said:

“We will be having a signing ceremony, yes. We will ultimately, yes, when we get together. And we’ll be having a quicker signing because we want to get it done. The deal is done, it’s just being translated right now.”

On December 13, US Trade Representative Robert Lighthizer revealed that representatives from both sides would sign the phase one deal in the first week of January.

Earlier today, Chinese Foreign Ministry spokesperson Geng Shuang confirmed Trump’s message and said that both countries had been in close contact, though he didn’t provide a specific date for the ceremony. Shuang stated:

“Both sides’ economic and trade teams are in close communication about detailed arrangements for the deal’s signing and other follow-up work.”

US officials revealed several conditions of the deal, including the tariff cuts from the US side. Elsewhere, China promised to buy US farm products and other types of goods. However, Beijing hasn’t confirmed any components of the phase one deal. A representative of China’s Commerce Ministry said that more details would be made public after the agreement is signed.

The Loonie has been under additional pressure after Statistics Canada said that the country’s gross domestic product declined in October by 0.1%, while economists expected an increase by 0.1%. This was the first monthly contraction in Canada’s economic growth since February. Nevertheless, analysts believe the unexpected drop was only temporary and won’t affect the annual pace.

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