• Latest Canadian employment data expected today
  • USD also gained against EUR, NZD, and AUD
  • Greenback weakened against JPY, CHF and GBP

The Canadian dollar weakened against the USD yesterday in the run-up to the release of the latest employment data early today. The diplomatic row between Saudi Arabia and Canada, meanwhile, shows no sign of reaching a conclusion.

Oil prices have stopped their downward trend for now after renewed American sanctions against Iran led to concerns about that country’s oil supplies. If China and the United States are unable to resolve the trade conflict between them, this could curb the demand for oil.

The CAD, meanwhile, is not benefiting much from NAFTA optimism. The US and Mexico met without them, and they appear to be rapidly approaching an auto agreement.

Mexico has been keeping the possibility of trilateral negotiations on the table, and Canada’s Economy Minister said yesterday that his country might join the talks again next week. This suggestion was met with a rather lukewarm response from the US camp.

The USD strengthened 0.10% against the CAD yesterday and is now trading at 1.3034 CAD, with many investors opting for what they see as “safe havens” amid rising trade and geopolitical tensions.

The USD also gained against the EUR, NZD and AUD but lost some ground against perceived safe haven currencies such as the JPY and CHF. The GBP also strengthened after the EU gave Brexit talks a major boost.

The general expectation is that Canada will have created 17,500 new jobs in July, after adding 31,800 new jobs in June. If this happens, the Bank of Canada will be under renewed pressure to increase its benchmark interest rate.

Analysts expect the Canadian unemployment rate to decrease to 5.9%.

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