USD/CAD – Canadian Dollar Unchanged, Trudeau Meets With Trump

USD/CAD is showing little movement in the Monday session. Currently, the pair is trading at the 1.31 line. Investors will be starting the week looking for economic cues, as there are no Canadian or US releases on the schedule. On Tuesday, The US releases PPI and Janet Yellen will testify before Congress.

Canadian Prime Minister Justin Trudeau meets with President Trump in Washington on Monday. Trudeau will be looking for reassurances that Trump does not intend to dampen the special trade relationship between the two countries, which is anchored by the NAFTA trade agreement. Under NAFTA, trade between Canada, the US and Mexico reached $1.1 trillion in 2016.  Trump’s protectionist stance has sent off alarm bells in Ottawa, as 80 percent of Canadian exports head to the United States. Trump has declared that he plans to renegotiate NAFTA, which could spell bad news for Canada. Trudeau will be looking for assurances that the US will not take implement any harmful trade moves against Canada such as border levies.

US crude stockpiles continue to record surpluses. On Wednesday, Crude Oil Inventories made a splash, soaring 13.8 million barrels, according to the Energy Information Administration (EIA). The indicator has recorded five straight surpluses, easily exceeding forecasts on each occasion. The huge gain also marked the highest surplus since late October. Crude posted sharp losses on Tuesday, following the release of the API inventories report, which predicted a surplus of 14.2 million, compared to a forecast of 2.38 million. The EIA says that US production in 2017 will be the highest since 1970, so cuts from OPEC and Russia may not lead to higher oil prices, due to the steady increase in US crude production. The Canadian dollar is sensitive to crude fluctuations, so stronger oil prices would likely boost the Canadian dollar.

Donald Trump continues to entangle himself in controversy, with US allies, the media and the Supreme Court. On Thursday, Trump said that the administration was working on a “phenomenal” tax plan, which would be released in a few weeks, although he gave no details. Trump’s plan is expected to lower taxes for both corporations and individuals, although tax reform promises to be a slow and daunting task, as changes to the US tax code can only be made by Congress. Still, the markets are hungry for any movement in this direction, and the dollar could get a strong boost once Trump outlines his tax agenda.

USD/CAD Fundamentals

Monday (February 13)

• There are no US or Canadian releases

Tuesday (February 14)

• 13:30 US PPI. Estimate 0.3%
• 15:00 US Fed Chair Janet Yellen Speech

*All release times are GMT

*Key events are in bold

USD/CAD for Monday, February 13, 2017

USD/CAD February 13 at 8:50 EST

Open: 1.3118 High: 1.3121 Low: 1.3071 Close: 1.3103

USD/CAD Technical

• USD/CAD inched lower in the Asian session. The pair has posted small gains in the European trade
• 1.3003 is a support line
• 1.3120 is a weak resistance line

Further levels in both directions:

• Below: 1.3003, 1.2922 and 1.2815
• Above: 1.3123, 1.3253, 1.3371 and 1.3461
• Current range: 1.3003 to 1.3120

OANDA’s Open Positions Ratio

USD/CAD ratio is unchanged in the Monday session. Currently, long positions have a majority (55%), indicative of trader bias towards USD/CAD continuing to move higher.

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