The Canadian dollar is trading sideways in the Friday session, after posting strong gains in the Thursday session. Currently, USD/CAD is trading at 1.2924, up 0.13% on the day. On the release front, Canada releases key consumer data. CPI is expected to post a rare decline, with an estimate of -0.1%. Retail Sales is forecast to rebound and record a gain of 0.6%. There are no major releases out of the U.S.
The U.S dollar is broadly lower this week, and the Canadian dollar has jumped on the bandwagon, posting gains of close to 1%. On Thursday the pair dropped to 1.2884, its lowest level since June 11. However, the Canadian currency’s gains have been pared due to pressure on oil prices. If this continues, the Canadian dollar could surrender some of its recent gains.
The US-China trade war is heating up, with the two economic giants exchanging tariffs this week. On Monday, U.S President Trump announced 10% tariffs on some $200 billion worth of Chinese goods. China quickly responded, slapping 10% tariffs on $60 billion in US exports. These tit-for-tit tariffs have become a familiar script, only this time investors haven’t panicked and snapped up U.S dollars. Investors are somewhat relieved that the tariffs are just 10%, and China is taking measures to reduce the effect of the tariffs on its economy, including increasing stimulus and infrastructure spending. Global growth remains strong, despite the tariff spat. However, China has also threatened to cancel upcoming trade talks with the U.S, in protest of the recent U.S tariff.
