USD/CAD is showing little movement in the Monday session. Currently, the pair is trading at 1.3234, up 0.10% on the day. On the release front, there are no Canadian or U.S. events on the schedule, so we can expect a quiet day from the pair. On Tuesday, the U.S. releases CB Consumer Confidence, which is expected to drop to 125.0 points.
The Canadian dollar received an unexpected boost on Friday, courtesy of Donald Trump. The U.S. president signed a bill which provided funds for the U.S. government to operate for three weeks. The breakthrough has raised hopes that an agreement can be reached to end the shutdown, which has lasted over a month. Risk sentiment jumped on the news of a deal, and the Canadian dollar surged over 1.0% on Friday, hitting a 2-week high.
At the same time, last week’s soft Canadian data is a cause for concern. Manufacturing Sales declined by 1.4% in November, its sharpest decline in over a year. Consumer spending also sagged in November. Retail Sales and Core Retail Sales both recorded declines, with readings of -0.9% and -0.3%, respectively. The economy will receive a report card on Thursday, with the release of the monthly GDP report. This key event should be treated as a market-mover.
