USD/CAD is unchanged in the Monday session. Currently, USD/CAD is trading at 1.3384, down 0.01% on the day. On the release front, there are no major events on the schedule. Canadian Foreign Securities Purchases is expected to dip to C$6.20 billion. In the U.S., the Empire State Manufacturing Index is expected to drop to 20.1 points. On Tuesday, Canada releases manufacturings sales and the U.S publishes building permits and housing starts.
The Canadian dollar continues to struggle. The currency has declined for four straight weeks, dropping 1.8% in that time. Weaker oil prices and a slowdown in the U.S. are weighing on the Canadian economy and the export sector is being hampered by the ongoing U.S-China trade war. The Bank of Canada is expected to respond by scaling back rate hikes. The bank has raised rates three times this year, but stayed on the sidelines at the December meeting. With the Federal Reserve expected to raise rates just once or twice in 2019, there will be less pressure on the BoC to raise rates.
