The Canadian dollar has started the week with slight gains. Currently, the pair is trading at 1.3365, up 0.14% on the day. On the release front, Canada releases manufacturing PMI, which has slowed for three straight months. Will we see a rebound in the March release? In the U.S., retail sales are expected to tick up to 0.3%. On Tuesday, the U.S. posts durable goods orders.
The Canadian dollar ended the week with strong gains, as Canada’s GDP posted a gain of 0.3% in January. This beat the estimate and came after two successive declines, which has raised concerns about the health of the Canadian economy. The slowdown in the fourth quarter has forced the BoC to turn more dovish and shelve any plans of hiking interest rates. There has even been calls for a rate cut from the bank, but the GDP gain in January will lessen the pressure on the BoC to stimulate the economy.
Investors are keeping a close eye on the ebb and flow of the U.S.-China trade talks, which continues to affect the movement of currency markets. The negotiations between the sides continues and there have been reports of progress. However, optimism waned on Thursday, after a senior U.S. official said that it could be months before a deal is reached. These remarks have raised risk aversion and boosted the dollar.
