The Canadian dollar is slightly lower at the start of the new trading week. Currently, USD/CAD is trading at 1.2982, up 0.09% on the day. On the release front, there are no Canadian or U.S events on the schedule. The U.S markets are closed for Memorial Day, so traders can expect a quiet day from the pair. On Tuesday, the U.S releases CB Consumer Confidence, which is expected to dip to 128.7 points.
The drama and uncertainty continue to swirl around the upcoming summit between President Trump and North Korean leader Kim Jong-un, which may or may not take place on June 12 in Singapore. Just a few days ago, Trump sent a letter to Kim, saying that Trump was canceling the much-anticipated meeting. However, the response from Pyongang was restrained, and the White House has sent a team to Singapore in case the summit is back on. Meanwhile, the leaders of South Korea and North Korea met on the weekend. That meeting was completely unexpected and raises hopes of a breakthrough in the long conflict between the two Koreas.
The Canadian dollar remains under pressure and has lost 1 percent in the month of May. On Monday, USD/CAD is just shy of the symbolic 1.30 level, which has held firm since March. The currency could face a rough week if, as expected, the Bank of Canada holds interest rates at 1.25 percent. Inflation has moved closer to the BoC target of 2 percent and economic growth has been steady, so the bank may opt for the sidelines when policymakers meet on Wednesday. However, with the Federal Reserve widely expected to raise rates next month, the Canadian dollar will be less attractive to investors.
