The Canadian dollar continues to lose ground and has recorded losses for a sixth consecutive day. In Tuesday’s North American session, USD/CAD is trading at 1.3019, up 0.36% on the day. On the release front, there are no Canadian indicators. The US releases CB Consumer Confidence, which is expected to dip to 128.0 points. On Wednesday, there are a host of key indicators. Canada will release Current Account and the Raw Materials Price Index, and the US publishes ADP nonfarm payrolls and Preliminary GDP.
The Canadian dollar remains under pressure this week. The currency has declined 1.4 percent in the month of May and is currently at its lowest level since mid-March. There could be further headwinds for the dollar this 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. Meanwhile, the growing political crisis in Europe has unnerved investors, which could hurt minor currencies like the Canadian dollar, which tends to lose ground when risk appetite is weak.
Is the summit on or off? 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 White House has since sent a team to Singapore and a senior North Korean official is on his way to Washington to meet with Secretary of State Mike Pompeo. These moves have fueled speculation that the summit will take place, although curiously, neither side has confirmed this.