The Canadian dollar has posted losses on Tuesday. Currently, USD/CAD is trading at 1.2980, up 0.38% on the day. On the release front, there are key events on both sides of the border. Canada releases Labor Productivity is expected to edge up to 0.3%. The US will release ISM Non-Manufacturing PMI, which is expected to improve to 57.9 points. On Wednesday, Canada releases two key events – Trade Balance and Building Permits. As well, Canada releases Ivey PMI.
Canada is the host of the G-7 meetings this year, and finance ministers from six countries were united in their criticism of US Treasury Secretary Steve Mnuchin over a brewing trade war. Last week, the Trump administration imposed stiff tariffs on Canada, Mexico and the European Union. Canadian Prime Minister Trudeau tweeted that the tariffs were “unacceptable” and said that Canada would “impose dollar for dollar tariffs for every dollar levied against Canadians by the US.” Canada will host the G-7 leaders, and European leaders have made clear that they want the U.S tariffs to be high on the agenda. If the trade battle escalates, Canada’s export-reliant economy could take a hit and drag down the Canadian dollar.
The on-again-off-again Korea nuclear summit is back on, complete with a starting time. The much-heralded meeting between President Trump and President Kim Jong-un will take place in Singapore on June 12, at 9:00 AM sharp. The summit will mark the face ever face-to-face meeting between leaders of the U.S and North Korea, but Trump has tried to lower expectations, saying that he does not expect the sides to sign an agreement. Rather, the meeting would mark the start of a process. North Korea is unlikely to agree to denuclearization, but the fact that the two sides are talking is likely to continue boosting investor risk appetite, which could boost the Canadian currency.
Tuesday (June 5)
- 8:30 Canadian Labor Productivity. Estimate 0.3%
- 9:45 US Final Services PMI. Estimate 55.7
- 10:00 US ISM Non-Manufacturing PMI. Estimate 57.9
- 10:00 US JOLTS Job Openings. Estimate 6.49M
- Tentative – US IBD/TIPP Economic Optimism. Estimate 54.2
Wednesday (June 6)
- 8:30 Canadian Trade Balance
- 8:30 Canadian Building Permits
- 10:00 Canadian Ivey PMI. Estimate 69.7
*All release times are DST
*Key events are in bold
USD/CAD for Tuesday, June 5, 2018
USD/CAD, June 5 at 7:25 DST
Open: 1.2930 High: 1.2983 Low: 1.2915 Close: 1.2979
USD/CAD was flat in the Asian session and has edged higher in European trade
- 1.2943 has switched to a support role following gains by USD/CAD on Tuesday
- 1.3015 was tested earlier in resistance
- Current range: 1.2943 to 1.3015
Further levels in both directions:
- Below:1.2943, 1.2850, 1.2757 and 1.2614
- Above: 1.3015, 1.3125 and 1.3224
OANDA’s Open Positions Ratio
USD/CAD ratio is unchanged in the Tuesday session. Currently, long positions have a majority (62%), indicative of USD/CAD continuing to move higher.