USD/CAD has posted small gains in the Wednesday session. Currently, the pair is trading at 1.3657, up 0.13% on the day. On the release front, there are no major events. The U.S. and Canada will both release manufacturing PMIs, which gauge the strength of the manufacturing sector. On Wednesday, the U.S. will release ADP nonfarm payrolls and unemployment claims.
The Canadian dollar remains under pressure, posting weekly losses for six straight weeks. The wobbly currency even lost ground during a quiet Christmas week. USD/CAD has jumped 3.7% since mid-November, as turmoil in the equity markets has soured risk appetite and made minor currencies like the Canadian dollar less attractive. The volatility in U.S. markets was especially pronounced last week, as stocks plunged but then rebounded. There is widespread concern that the global trade war will continue to take a bite out of the global economy, which could mean more headwinds for the Canadian dollar, a commodity currency.
Another factor hurting the Canadian dollar, which is sensitive to commodity prices, is the sharp drop in oil prices. WTI crude, which is currently selling at $44 a barrel, has plunged 39% in just three months. Weaker economic conditions worldwide could mean that oil prices will remain depressed in the coming months.
