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US Dollar to Canadian Dollar Exchange Rate Fails to Recover as US Economy Stumbles

January 4, 2019 - Written by John Cameron

USD/CAD Exchange Rate Slips, But May Claw Back On Positive US Nonfarm Rolls Figures

The US Dollar Canadian Dollar (USD/CAD) exchange rate is down 0.2% today and is currently trading within the region of $1.3449.

The US Dollar (USD), however, may recover against the Canadian Dollar (CAD) later today with the release of the US Nonfarm Payrolls figures for December, which are expected to show an increase in positions.

Today will also see the release of the US Average Hourly Earnings year-on-year figures for December which are, however, expected to decrease – potentially hindering any major recovery for the US Dollar.

However Canada is also do to publish its own jobs data, and if the unemployment rate increases as forecast the Canadian Dollar will come under pressure of its own.

US Dollar Canadian Dollar (USD/CAD) Exchange Rate Down as Partial Government Shutdown Continues

Today will also see the release of the US Unemployment Rate figures, which are, however, expected to remain static at 3.7%.

However these will be followed by the release of Canada’s Unemployment Rate figures which are expected to increase, potentially strengthening the USD/CAD exchange rate.

Today’s news that US and China will be holding trade talks in Beijing next week has also released some pressure on the USD.

USD remains weakened as the partial US government shutdown has exacerbated domestic US political tensions, with the Democrat House Speaker, Nancy Pelosi, challenging the shutdown today.

Meanwhile, Jerome Powell, the Chair of the Federal Reserve, is set to deliver a speech today at the American Economic Association today, with investors paying close attention to any signs of a softening tone on rate hikes.

Peter Boockvar, Chief Investment Officer at Bleakley Advisory Group, said:

‘I think first he has to tell the markets he’s going to take a pause on rate hikes before he starts talking about the balance sheet.’

USD/CAD Forecast: US-China Trade Talks in Focus

Looking ahead to next week, the US will see the release of its ISM Non-Manufacturing PMI figures for December on Monday, which are expected to show a decline in activity. If that proves to be the case, the US Dollar could come under pressure.

Meanwhile, talks are expected to take place between the US and China next week over Monday and Tuesday.

China’s Ministry of Commerce commented that these talks would involve ‘implementing the important consensus’ reached by China’s President Xi Jinping and US President Donald Trump, potentially easing some pressure over US and China’s recent trade tensions.

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