USD/CAD Likely to Consolidate Till Later in the Week

The USDCAD has been very volatile and choppy over the last 24 hours as the various developments over the NAFTA deal seem to be having a large impact on the pair and this has led to the pair racing higher through the 1.29 region only to drop back during the course of the day yesterday and it again trades below the 1.29 region as of this writing.

USDCAD Awaits Data

There has not been much by way of fundamental and economic data from the US or Canada over the last 2 days but the pair has been rocked by the possibility that the NAFTA deal could be renegotiated. This is something that has been on the anvil for quite sometime over the last few week but not much progress had been made as such reports come off and on the headlines and hence these did not have much of an impact on either the dollar or the CAD. On the other hand, it i only during the last couple of days that this has begun to gain speed.

There is a lot of talk that the NAFTA deal could be discussed and changed and though the market assumes that this could be beneficial for Canada in the long run, considering that Trump has been generally in favor of Canada over a lot of measures and agreements that he has undertaken, nothing can be decided for sure and it remains to be seen how such talks, if and when they happen, are likely to pan out in due course of time.

Looking ahead to the rest of the day, we do not have any major news from the US or Canada. We believe that the market would consolidate for much of the day today as the traders wait in anticipation for the employment data from both the US and Canada later in the week.