The Canadian dollar is almost unchanged in the Tuesday session. Currently, USD/CAD is trading at 1.3244, down 0.06% on the day. In economic news, there are no Canadian events. The U.S. releases CB Consumer Confidence, which is forecast to dip to 136.2 points. On Wednesday, the U.S. publishes Preliminary GDP for the third quarter, with a forecast of 3.6%.
With a dearth of Canadian indicators this week, investors will be keeping a close eye on the G-20 summit in Argentina, which begins on Friday. President Trump will meet with Chinese President Xi Jinping, and the stakes could not be higher, given the full-blown trade war between the world’s two largest economies. Will we see a thaw in the tariff spat, or will Trump and Xi take shots at each other’s policies? Last week, White House advisor Larry Kudlow warned that the summit could be the scene of a direct confrontation between the parties. However, President Trump has a knack of reaching agreements with his adversaries despite hostile rhetoric, so it’s entirely possible that the parties will agree to keep negotiating, which could lift the mood of investors and boost the equity markets.
The spanking new USMCA trade pact was supposed to herald stability for the Canadian auto sector, but the news was grim on Monday, as auto giant GM announced sweeping cutbacks, including the closing of the GM plant in Oshawa, Ontario. This drastic move will throw some 3,000 of workers out of work and has shaken the auto industry, a critical component of the Canadian economy. If the U.S-China trade war continues, Canadian exports could take a hit and the Canadian dollar could face further headwinds.