The US dollar is little changed against the Canadian dollar on Thursday morning as Forex markets shrug off the decision by the US Senate to vote against convicting US President Trump in his impeachment. All the action can be seen in stock markets where the S&P 500 hit fresh record highs on Wednesday and Asian shares are seeing big gains after China cut tariffs on $75bn worth of US imports.
USD/CAD was higher by 1 pip (+0.01%) to 1.3278 with a daily range of 1.3273 to 1.3289 as of 8.30am GMT. The currency pair finished Wednesday essentially flat with small gains of +0.09% and has spent Thursday morning hovering around 1.328.
USD vs Canadian dollar – Optimism is picking up again in US amid strong economy performance
If stock markets are anything to go by, optimism is picking up again in the United States, thanks in part to the strong performance of the US economy. FX markets might settle down following some top draw economic data from the United States in the past few days ahead of Friday’s non-farm payrolls (NFP) release. There are some minor economic reports, including weekly jobless claims to get through before NFP, as well as the reaction from the US President to his acquittal that could create some volatility in exchange rates.
Although more muted against the Loonie (with a weekly return of +0.35%), the US dollar has performing well against a basket of currencies thanks to some impressive datapoints. In January we saw the best private jobs growth in a month since 2015 and the highest service sector activity in five months.
It might be that the US dollar is losing some steam against the Canadian dollar after four weeks of gains on the trot. Another consideration is a pickup off the lows in the oil price thanks to speculation about an emergency OPEC meeting, where members might choose to reduce oil output with the aim of supporting prices. The Canadian dollar is affected by oil price swings because one tenth of the Canadian economy is based on the oil industry, which benefits from a higher oil price.