USD/CAD has ticked higher in the Monday session. In North American trade, USD/CAD is trading at 1.2830, up 0.15% on the day. On the release front, it’s a quiet start to the week. There are no Canadian indicators on the calendar. The US releases the federal deficit, with an estimate of $222.3 billion. On Tuesday, Canada releases Ivey PMI and the US publishes CPI reports.
The Canadian dollar ended the week on a high note, posting gains on Friday. The Canadian economy added 15.4 thousand jobs in February, after a sharp decline of 88 thousand a month earlier. This was below the estimate of 21.3 thousand, but investors were pleased with the strong turnaround. In the US, US employment numbers were a mix on Friday. Wage growth dropped to 0.1% in February, down from 0.3% a month earlier. This missed the estimate of 0.2%, and marked the lowest gain in four months. The news was much better from nonfarm payrolls, which soared to 313 thousand, crushing the estimate of 205 thousand. The mixed numbers have eased concerns about the Fed raising rates four times in 2018, which is good news for the Canadian dollar.
Tensions have eased somewhat regarding the tariffs which President Trump imposed on Thursday. Trump has exempted Canada and Mexico from the tariffs, and has said that Washington could ease the duties on other countries as well. Importantly, is strong domestic opposition to Trump’s move, including senior Republican lawmakers who have said they will work to overturn the tariffs, which could spark an all-out trade war. So far, the markets are confident that a solution to the tariff tussle will be found.
