Loonie Under Pressure as Trump Creates More Trade Tension

Monday, June 25, 2018

 

The loonie is falling to start the week. After weak CPI and retail sales data Friday, expectations of a July Bank of Canada interest rate hike are falling. Gov. Poloz will be speaking Wednesday and may provide the market with more direction. Trade risks with the United States are elevated again with Trump tweeting over the weekend threatening reciprocity against countries who enact tariffs and barriers. Canadian GDP will be released Friday.

 

The US dollar is mixed versus major currencies. US equity markets are in turmoil and volatility is on the rise. The next few days will see consumer confidence Tuesday, durable goods orders Wednesday, and GDP Thursday. There are reports the US Government will announce new restrictions on Chinese investment and trade by the end of the week further igniting international trade tensions.

 

Data out of Europe was limited to German business climate which was at expectation (101.8 vs 101.9) but was still a lower number than previous months (102.3). However, the Euro is up versus most pairs.

 

North American Equities are down across the board: the Dow down 1.03%, the S&P down 1.01%, NASDAQ down 1.88% and the TSX down 1.01%.  Crude oil is down slightly 0.04% ($68.56) and Gold is down 0.21% ($1,268.00).

 

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