Loonie Flat as NAFTA Hope is Cancelled by Oil Drop

The Canadian dollar is nearly flat on Thursday despite the US dollar falling against other major pairs. Trade war fatigue has the greenback on the back foot and the loonie was higher as NAFTA negotiations restarted yesterday. US President Donald Trump on the Organization of the Petroleum Exporting Countries (OPEC) not doing enough to keep crude prices low put downward pressure on the commodity.

NAFTA talks continue today between the US and Canada with both sides remain optimistic but an agreement does not seem to be in the cards in the short term. Canada is facing pressure from the US and Mexico as both have political timelines that have to be met to insure a quick approval. Canadian Foreign Affairs Minister Chrysta Freeland remains committed to get the best deal for Canada and after 13 months of negotiation will not compromise for the sake of a quick deal.

CAD traders will be tracking Canadian inflation and retail sales data that is due out tomorrow at 8:30 am EDT. The consumer price index is forecasted to show a monthly loss of 0.1 percent but still on track to a yearly 2.8 percent pace. Retails sales are anticipated to show a more robust economy with a jump of 0.6 percent. The data will put an October rate hike by the Bank of Canada (BoC) firmly on the table if it beats expectations.

NAFTA soundbites have been few and far between with only general comments. Prime Minister Justin Trudeau and US President Donald Trump have been in contact throughout but there appears to be still a lot of work from both sides to reach an agreement.

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.