The Canadian dollar has continued its losing ways in the Wednesday session. Currently, USD/CAD is trading at 1.2889, up 0.44% on the day. The Canadian dollar has slipped 1.0%.percent this week, as USD/CAD has the 1.29 level in its sights. In economic news, BoC Governor Stephen Poloz will testify before the Standing Senate Committee on Banking. There are no key events in the US. On Thursday, the US releases durable goods orders and unemployment claims.
The US dollar continues to climb this week, buoyed by rising yields on US bonds, which have hit 4-year highs. On Wednesday, 10-year US Treasury notes have risen to 3.015%, and 2-year bonds have increased to 2.504 percent. With inflation appearing to be on the rise, there are stronger expectations that the Federal Reserve will raise rates four times in 2018, which is good news for the US dollar. With oil pushing above $70 a barrel, there are concerns that inflation will rise, which has pushed bond prices lower and yields upwards. The US currency has also benefitted from a reduction in geopolitical risk, with an easing of tensions between North and South Korea, and a lull in the conflict in Syria.
The trade battle between China and the US has become a geopolitical hotspot, dominating the headlines and shaking global markets. After a series of tit-for-tat tariffs between the economic giants, there has been widespread concern that these moves could lead to a trade war which would slow down Chinese growth and trigger a global recession. However, the bellicose rhetoric between the sides has eased and US Treasury Secretary Steven Mnuchin is scheduled to lead a delegation to Beijing. On Tuesday, President Trump said that “we’ve got a very good chance at making a deal.”
