USD / CAD - Canadian Dollar Crushed By Government Drama
Date
12/17/2024 3:18:28 PM
(MENAFN- Baystreet)
- Liberal government in turmoil-budget deficit soars.
- Canada inflation and US Retail Sales ahead.
- US dollar little changed but opens mixed.
USDCAD: open: 1.4292, overnight range,1.4232-1.4294, close 1.4242, WTI $69.65, Gold, $2637.76
The Canadian dollar is diving. In Ottawa, Sunny Ways is in dire straits which was exacerbated yesterday after Finance Minister Chrystia Freeland refused to table the Fall Economic Statement.
Ms Freeland is on record for claiming the 2024 budget deficit would not exceed $40.0 billion and the projected 2024 budget deficit is $69.1 billion. Freeland quit and Trudeau scrambled to find a new Finance Minister and Dominic Leblanc has accepted the job.
Global investors were unimpressed, and they sold Canadian dollars.
Canadian inflation numbers are due today, but they will not be a factor as the Bank of Canada is more concerned about weak economic growth.
US Retail Sales-ex autos are expected to have risen 0.5% m/m in November. (October 0.1%).
EURUSD remains confined to a narrow 1.0479-1.0534 band, weighed down by a weak German Ifo survey. The report indicated deteriorating business sentiment, with the Ifo Business Climate Index dropping to 84.7 in December from 85.6 in November, marking its lowest level since May 2020. The decline was largely driven by increased pessimism about future conditions. Some of the negative impact was softened by an improvement in the German ZEW economic sentiment index, which climbed to 15.7 from 12.5.
GBPUSD climbed from 1.2666 to 1.2707, following a robust UK employment report that bolstered expectations for the Bank of England to hold rates steady on Thursday. Average hourly earnings, including bonuses, grew 5.2% in the three months to October, up from the previous 4.4%, signaling continued wage pressures.
USDJPY is moving within a tight 153.69-154.35 range, lacking a clear direction as traders remain cautious ahead of Friday's Bank of Japan policy decision. Market pricing suggests only a 20% chance of a rate hike, keeping movements muted.
AUDUSD traded lower within the 0.6337-0.6379 band, pressured by overall US dollar strength and concerns about China's economic outlook. Market sentiment soured further amid renewed fears of tariff escalations following Trump's latest trade-related threats.
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