WASHINGTON AND THE U.S. DOLLAR
The spectacular nosedive in the USD/CAD exchange rate is not solely related to the change in course from the Bank of Canada. It is important to note that some of this movement can be explained by a generalized meltdown of the U.S. dollar, as illustrated by the decline of more than 7% since the start of 2017 in the US Dollar Index (DXY), which measures the strength of the USD against a basket of currencies.
Among the elements potentially behind this decline are growing doubts on markets as to the current U.S. administration’s ability to carry out the reforms promised during the election campaign. Yesterday, we learned that healthcare reform, one of the flagship promises from President Donald Trump’s campaign, would have to be shelved due to lack of support. The biggest question still remains: Can the much-awaited tax cuts be put in place?
Today, we’ll be keeping an eye on U.S. Housing Starts and Canadian Manufacturing Shipments.
Julien Duquette
Range of the day: 1.2575 – 1.2680