The Canadian dollar continues to lose ground this week. In Wednesday’s North American session, USD/CAD is trading at 1.3330, up 0.26% on the day. In economic news, there are no Canadian events for a third straight day. In the U.S, Preliminary GDP for the third quarter posted a gain of 3.5%, just shy of the estimate of 3.6%. This follows an identical gain of 3.5% in the Advanced GDP release. Thursday promises to be a busy day. Canada releases current account and there are three key events in the U.S. – Core PCE Price Index, personal spending and unemployment claims. As well, the FOMC releases the minutes of its November policy meeting.
The Canadian dollar continues to struggle. The currency is lower for a fourth straight day and USD/CAD has pushed above the 1.33 level for the first time since June. The ongoing U.S-China trade spat has hurt Canadian exports, and lower oil prices are also weighing on the economy. After a lack of Canadian events this week, Canada releases its monthly GDP report, and a solid reading could reverse the Canadian dollar’s fortunes.
The markets are keeping a close eye on the G-20 summit in Argentina, which begins on Friday. President Trump will meet with Chinese President Xi Jinping on the sidelines, and the stakes are high, 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? Trump has threatened to raise tariffs on Chinese products from 10 percent to 25 percent, but this could be grandstanding ahead of the summit. 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 wobbly Canadian dollar.