- USD/CAD logs in the four-day winning streak.
- Downbeat Canadian GDP, US-China political tussle and WTI pullback seem to favor the pair buyers.
- Year-end trading lull, absence of major catalysts will keep trade/political headlines in the driver’s seat.
USD/CAD rises to 1.3153 by the press time of early Tuesday. The pair holds onto its recovery gains from last Thursday. Doubts surrounding the future of US-China trade relations and a pullback in oil prices, Canada’s main export, are likely catalysts behind the pair’s latest increase.
With the Chinese media releases pour cold water on the US President Donald Trump’s statement of “achieving a milestone on phase-one”, export-oriented currencies like the Canadian dollar (CAD) witness a downside. Global Times recently spread a few headlines that show Beijing’s recent tariff relief isn’t because of the US trade war and the Trump administration has to work with China to restore trade relations.
Adding to the currency’s weakness was recently published in October month Gross Domestic Product (GDP) data. Canadian GDP for October fell below 0.0% market consensus and +0.1% prior to -0.1%.
Furthermore, prices of Oil have also witnessed a pullback as Russian Energy Minister Alexander Novak raised hopes of easing oil output caps in the March meeting of the OPEC and its allies (OPEC+).
Markets are likely to witness the year-end lack of momentum. Also increasing the boredom will be the absence of major data/events.
Technical Analysis
50-day Simple Moving Average (SMA) level of 1.3192 limits the pair’s immediate upside while 1.3100 holds the near-term declines confined.
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