The Canadian dollar is showing little movement to start off the trading week. Currently, USD/CAD is trading at 1.2874, up 0.05% on the day. On the release front, Canada releases Foreign Securities Purchases. There are no major events in the US. On Tuesday, the US will release Building Permits.
It could be a volatile week for the currency markets, as the Trump tax plan continues to wind its way through the corridors of Congress. On Friday, the House and the Senate reconciled their tax bills. The uniform bill now goes to both branches, where it is expected pass by a slim margin, as all Democrats plan to vote against the bill. Crucially, two Republican senators who were opposed to the bill have now lent their support to the bill. The legislation is the first major overhaul of the US tax code in 30 years, and would represent a major victory for President Trump, who has campaigned vigorously for the legislation and wants to sign it into law before Christmas.
The Canadian currency gained ground on Wednesday following comments from Bank of Canada Governor Stephen Poloz. who spoke at an event in Toronto. Poloz presented an upbeat assessment of the Canadian economy, and indicated that there is more room for rate hikes next year. With the Fed raising rates this week, and almost certain to do so again at the January meeting, the BoC will be under pressure to increase rates early in 2018, or else the Canadian dollar could take a tumble.
