Loonie Consolidates as NAFTA Talks Restart

Thursday July 26, 2018

 

The loonie is quiet this morning after strong gains in the Wednesday trading session. Another round of NAFTA discussions starts today between Canada, the USA, and Mexico. Expectations of a positive outcome for Canada are buoying the CAD and markets will be waiting any headline news to leak from the talks. There are no domestic data releases until GDP numbers Tuesday.

 

The US dollar is up versus most currency pairs on the positive tone of Trump’s meeting with European Commission President Juncker. Durable goods data missed expectation with core orders at 0.4% versus 0.5% and total orders at 1.0% versus 3.0%. Unemployment claims were in line at 217K. The USA will be leading the NAFTA discussions and may be trying to reach bilateral deals with Canada and Mexico rather than a unified deal. Trade relations with China may be overshadowed by the North American talks but are still a real threat to the USD and Yuan.

 

The European Central Bank kept their key interest rate at 0.00% (and deposit rate at -0.40%). In statements after, Mario Draghi told reporters, “significant monetary policy stimulus” was still required and the Euro responded by moving lower.

 

North American Equities are mixed: The Dow is up 0.49%, the S&P down 0.22%, NASDAQ down 0.88%, and the TSX up 0.11%. Crude Oil is up 0.03% ($69.28) and Gold is down 0.44% ($1,235.50).

 

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