The US Dollar remains strong this morning, continuing from yesterday. USD has rebounded strongly over the last few days, but momentum is turning. Strength should be short lived today. The market will be looking for some further direction from the President’s State of the Union address tonight.
Today is China’s New Year and for the rest of the week is the Spring Festival Golden Week holiday. The global markets will be quieter than unusual until next week. As a result, although CAD is quietly stronger this morning, look for weakness towards the end of the day as the market pauses from the strong run up experienced over the last couple of weeks. Energy is weaker this morning which is also limiting strength. The Canadian Balance of Trade numbers due today are widely expected to be negative. If there is a surprise and they are positive look for CAD to strengthen instead.
The EUR is slightly weaker this morning. Look for a slight retracement in directionless range bound trading.
Key Economic Numbers: Forecast Previous
CAD Balance of Trade -$1.7Bill -$2.06Bill
US Purchasing Manufacturers Index 59 58
US Redbook (Retail Sales: Year) – +5.8%
- Drummond Gill