USD/CAD Daily Fundamental Forecast – April 27, 2017

The USDCAD pair has assumed a very volatile stance over the last few days as the news from the US seems to be coming in thick and fast with twists and turns almost on a daily basis and all this news seems to be affecting the CAD directly. In this mix, we have the weak oil prices as well and a combination of these has helped to keep the pair volatile during the course of the week. At the early part of the Trump Presidency, we saw him carrying out threats to the NAFTA agreement and saying that he would like to have a relook into it. This was a part of his campaign promise and it was during this time that the CAD weakened last and we saw the pair in the 1.35 region following this.

USDCAD Highly Volatile

This was followed by a period of around 2 months when Trump threw this threat into the backstage and concentrated on some of his domestic campaign promises and this helped to provide some relief to the CAD. This saw the pair make a correction towards the 1.3250-1.33 region but it was clear that the weakness for the CAD was just around the corner. This week, we have seen it surface again as we hear reports that Trump is once again looking into the NAFTA agreement seriously.

For a few hours yesterday, there were reports that he could scrap the NAFTA agreement totally, which would mean that trade between the US and Canada would be seriously affected. This pushed the USDCAD pair beyond 1.36 but later in the day, we got a clarification from his team that there was no question of cancellation of the agreement and it was more about a relook and suggestion of some major changes to it rather than any cancellation. This provided some relief to the CAD and we saw the pair move below 1.36 once again.

Looking ahead to today, we do not have any major news from Canada for today but the NAFTA agreement is likely to hog the headlines in the short term and until some clarity emerges, we are likely to see some choppy trading in the USDCAD pair on either side of 1.36.