A mood of risk aversion swept over markets yesterday as trade tensions continued to escalate. The loonie, which is usually hard-hit in such an environment, once again took a beating, plunging to its lowest level in the past 12 months. Sources of pressure on our currency are piling up, such as the Trump threat to the global economic order, the NAFTA debacle and a potential increase in crude oil output from OPEC and Russia.
Although it is a far less imposing foe than China in terms of trade volume, Russia has now entered the fray by slapping tariffs on imports of U.S. goods.
In other news, U.S. Housing Starts posted a solid showing last month with 5% growth, while Building Permits fell by 4.6%. Builders are upbeat regarding demand, however, they are keeping in mind that tariffs on Canadian materials could harm the affordability of new homes.
Meanwhile, U.S. President Donald Trump accused Canadians of deliberately scuffing up U.S.-bought shoes to deceive customs officers and smuggle them back home without paying taxes. I trust you’re all ashamed!
Yusuf Kocagozli
Range of the day: 1.3230 – 1.3330