The wider than anticipated merchandise trade deficit offset higher oil prices and better equity markets, leaving the Canadian dollar unchanged on the day. Also, further announcements that the NAFTA talks are culminating to form an agreement, provided strength to the CAD.
Tomorrow’s Canada employment numbers will provide further evidence of a growing economy, expectations are 20K new jobs for the month of March, the unemployment rate will remain unchanged at 5.8%.
USDCAD 1.2771, 1.2770, 1.2756, 1.2812, 1.2831, 1.2838
- A cautious tone came down upon the financial markets today as China responded to the US with trade tariffs on US goods.
- The construction sector in the UK literally froze in March as the beast from the East put this sector into contractionary territory in March.
- Inflation in Europe ticked higher, while the unemployment rate dropped.
- US service sector activity slows albeit from buoyant levels.
China struck back in the looming trade war with the US by imposing a 25% tariff on 106 US goods, with soybeans being the focus.
The Dollar continues to trade in a quiet range against the Euro as the service sector PMI reading came in weaker than expected at 58.8 from 59.5 previously.
The Pound continues to prove resilient as the market shrugged off the weaker than expected construction data in the expectation that activity will bounce back again in April.
Unemployment in the EU dropped to 8.5% while the inflation rate rose from 1.1% to 1.4%.
The Canadian Dollar is weaker against its US counterpart, pulling back from an earlier five-week high amid rising trade tensions. Housing data also weighed on the Loonie as Toronto homes sales sagged in March, tumbling 39.5% from the previous year, as tighter mortgage rules and higher borrowing costs dampened demand.
The Australian Dollar has been given a brief respite from the trade-related selling after better-than-expected data on retail sales, which rose 0.6% in February, double market expectations and bucking a trend of minimal growth. Other data released pointed to resilience in the housing market, as approvals to build new homes eased 6.2% in February, but that followed hefty gains in January. The Aussie remains close to its lowest levels since December and risks remain for a move lower while trade tensions build.
Nigeria’s central bank kept interest rates on hold at a record high of 14%, where it has been since July 2016, to support the Naira and help curb inflation. Inflation fell to an almost one-year low in February at 14.3%. The country’s economy emerged from its first recession in 25 years last year. But growth remains fragile, not helped by turbulent politics as the government was forced to cut spending due to the collapse in oil price, although higher oil prices and debt sales over the last few months have helped the continent’s biggest crude producer to accrue billions of dollars in foreign reserves.