NAFTA Optimism not Lifting Loonie
The Canadian dollar is lower on Thursday awaiting employment data to be released early on Friday. The diplomatic row between Canada and Saudi Arabia continues as both nations are standing their ground.
Oil prices have halted their skid as concerns on Iranian supplies following the reactivation of the US sanctions and a curb in demand if China and the US trade dispute is not resolved.
The loonie is getting little support form NAFTA optimism as Mexico and the US met without them and appear to be close to an auto agreement.
Mexico has kept the door open on trilateral negotiations and the Economy Minister said today that Canada could rejoin negotiations next week. The US has not been as inviting and it is well know their preference is for bilateral negotiations.
The USD/CAD gained 0.10 percent on Thursday. The currency pair is trading at 1.3034 as investors are flocking to safe havens as geopolitical and trade tensions are on the rise.
The USD is higher against the CAD, EUR, AUD and NZD but has depreciated against safe havens CHF and JPY with the GBP gaining after a huge boost to Brexit negotiations by the EU.
Canada is expected to have added 17,500 jobs last month. The gain after the strong 31,800 jobs in the previous report will keep the pressure on the Bank of Canada (BoC) to keep lifting its benchmark interest rate.
The market will focus on the data published by Statistics Canada on Friday at 8:30 am EDT to price in the effect of a strong employment component. Economists expect the unemployment rate to drop to 5.9 percent and added to a solid gain in jobs would put an October rate hike by the central bank firmly on the table.
Market events to watch this week:
Friday, August 10
4:30am GBP GDP m/m
4:30am GBP Manufacturing Production m/m
4:30am BP Prelim GDP q/q
8:30am CAD Employment Change
8:30am CAD Unemployment Rate
8:30am USD CPI m/m
8:30am USD Core CPI m/m
*All times EDT
For a complete list of scheduled events in the forex market visit the MarketPulse Economic Calendar
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Alfonso Esparza
trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
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