USD/CAD is almost unchanged in the Monday session. Currently, the pair is trading at 1.3350. On the release front, it’s a quiet start to the week, with no economic indicators in Canada or the US. On Tuesday, the US releases CB Consumer Confidence.
The US dollar enjoyed an impressive run after Donald Trump’s election last November. However, the euphoria over President Trump’s upset election win is long past. The inquiry into the Trump administration’s links with Russia continues to make headlines, and is another cause for concern for nervous investors. Trump has been in office for over two months, but he has yet to provide any details over even an outline of economic policy. Last week, Trump’s proposed bill to change Obamacare was not even voted on, as the White House could not garner enough support to pass the bill. This debacle will only increase market uneasiness over Trump, and could send the DAX lower.
The Canadian dollar is sensitive to movement in oil prices, so lower crude prices could weigh on the currency. West Texas crude has dropped 1.0% in March, and dipped to $47.05 last week, its lowest level since the end of November. Crude headed lower after Crude Oil Inventories posted a strong surplus of 5.0 million barrels, crushing the estimate of 1.9 million. The weekly indicator has recorded only two declines in 2017, as US oil drillers continue to enter the market and ratchet up US oil production. This, together with increased US shale production, has more than offset OPEC’s production cuts. Last week, OPEC announced it was considering extending the production cut agreement by another 6 months, until the end of 2017, but it’s doubtful that such a move will prop up oil prices.
