Canadian Dollar under pressure


While the attentions of the markets have been diverted by Stocks & Politics, the Canadian Dollar (USDCAD) has been quietly weakening. Yesterday it breached the 1.3385 top that was established at the end of June, but was unable to close above it. Today, we see another wave of CAD weakness that seems intent on rectifying yesterday’s loss of belief.  Interestingly, the Canadian Dollar has even looked weak against Sterling (GBPCAD), a scenario that few would expect given the current uncertainty surrounding the Pound. The news that Canada have now inserted themselves into a China/USA trade spat by arresting the CFO of Huawei {in connection with suspected violation of US/Iran trade sanctions) is unlikely to ease tensions, particularly if the US suspect is extradited to the custody of the US. Beijing is unlikely to respond well to this, all of which tends to make the outlook for the Canadian dollar even more precarious.

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