The Canadian dollar has started the week quietly. Currently, USD/CAD is trading at 1.2604, down 0.08% on the day. In economic news, the US releases key consumer sales reports. Retail Sales are expected to improve to 0.4%, after two straight declines. Core Retail Sales is forecast to remain unchanged at 0.2%. On Tuesday, the US releases Building Permits and Housing Starts.
It was a dramatic weekend, as a US-led strike destroyed several chemical installations in Syria. Predictably, Syria and Russia strongly condemned the attack, but are unlikely to retaliate despite the rhetoric. The markets had already priced in an attack, and are hopeful that Trump’s declaration of “mission accomplished” means that things will remain relatively quiet in Syria. However, further chemical attacks by the Syrian regime could trigger a response from the US and its allies, which could result in volatility in the markets, and minor currencies like the Canadian dollar would likely take a hit.
The Canadian dollar has looked sharp in the month of April, posting gains of 2.5 percent. However, there could be some headwinds around the corner, as the US has threatened to attack Syria for an alleged chemical attack on the weekend. The situation has become further complicated as Russia has promised it will shoot down any US missiles aimed at Syria. President Trump had vowed that a strike was imminent, but has since backtracked, to the relief of the markets. Still, Trump is unpredictable, and if the US carries out a military strike, panicky investors could dump minor currencies such as the Canadian dollar. Meanwhile, a fact-finding team from the Organization for the Prohibition of Chemical Weapons has arrived in Syria to attempt to verify if a chemical attack did indeed take place.