April 3, 2019 - Written by John Cameron
STORY LINK US Dollar Canadian Dollar (USD/CAD) Exchange Rate Steadies as US-China Trade Talks Reach Crucial Stages
USD/CAD Exchange Rate Flat as US-China Trade Talks in ‘End-Game’
The US Dollar Canadian Dollar (USD/CAD) exchange is steady today and is currently trading around $1.3164 on the inter-bank market.
The US Dollar (USD) steadied against the Canadian Dollar (CAD) today as US-China trade talks approach their ‘end-game’ in which the two superpowers are expected to come to a consensus.
Analysts at Commerzbank, however, remained cautious, saying:
‘The conclusion is that the trade talks this week is crucial – either a deal can be done, or the negotiation will be extended again to June at least.’
This has weighed on the ‘Greenback’ today as many traders have fled safe-havens like USD for riskier currencies, with the Chinese yuan has benefiting from trade agreement hopes.
USD was further weakened by the release of the US ADP employment change figures today, which came in lower-than-expected at 129k.
The Canadian Dollar, meanwhile, has improved on signs of easing global risk sentiment, and with the Canadian economy being particularly sensitive to on-going talks between the US-China, hopes are providing some uplift for the ‘Loonie’.
CAD/USD Exchange Rate Rangebound as Canadian Political Tensions Mount
Ongoing Canadian political controversies, however, are providing a drag on some of the Canadian Dollar’s gains, as the SNC-Lavalin scandal involving Prime Minister Justin Trudeau, are continuing to flare up.
Today saw 2 MPs expelled from his party after accusing Mr Trudeau of meddling in the criminal case.
Andrew Scheer, leader of the opposition party, commented on Twitter:
‘By kicking Jody Wilson-Raybould and Jane Philpott out of caucus, the Liberals have sent Canadians a clear message: If you tell the truth, there is no room for you in the Liberal Party of Canada.’
These pressures, however, have been weathered well by the ‘Loonie’, after a strong beginning to the week following on from the Governor of the Bank of Canada, Stephen Poloz, who showed a general bullishness for the future of the Canadian economy.
USD/CAD Forecast: ‘Loonie’ Could Rise on Improved US-China Relations
Canadian Dollar investors will be looking ahead to tomorrow’s publication of the Canadian Ivey Purchasing Managers Index figures for March, and with any signs of improvement this could see the CAD/USD exchange rate rise.
US Dollar traders, meanwhile, will be keeping a close eye on developments between the US and China following their potential closure on trade talks this week.
Tomorrow will see the publication of US jobs figures, and with any indications that unemployment is decreasing could prove ‘Greenback’-positive.
The USD/CAD exchange rate, however, will be directed by global political developments over the next few days, and if the US and China do secure a trade deal, this could see the trade-sensitive ‘Loonie’ improve.
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