CAD
The Canadian dollar continues to face headwinds, driven by political uncertainty and tariff-related risks, which have kept USD/CAD near multi-year highs. With a relatively light economic calendar for Canada this week, we expect the loonie to remain under pressure, primarily due to these external factors.
USD
The US Dollar continues to trade within recent ranges. Yesterday, the dollar initially weakened across the board following a softer-than-expected Core CPI report, which pushed the greenback lower against the EUR and GBP. However, it rebounded later in the session, trading broadly stronger against its major counterparts and aligning with prevailing market levels. Today’s key data releases for the USD include Initial Jobless Claims and Retail Sales. Beyond scheduled economic data, market attention remains focused on the incoming Trump administration and the potential implications of tariffs.
EUR
The euro remains under pressure as low growth and ongoing political uncertainty weigh on the single currency, particularly against the USD. We maintain the view that EUR/USD will remain subdued in the short term, as weak EU growth and the impact of US tariffs are expected to sustain downward pressure. With no significant data releases from the EU today, EUR movements are likely to be driven by USD price action.
GBP
Sterling found brief support yesterday after UK CPI came in lower than expected, with inflation slowing to 2.5% from a forecasted 2.6%. However, concerns around fiscal policy and gilt yields continue to leave the pound vulnerable to downside risks. This morning’s UK GDP data showed modest growth of +0.1% for November, while Industrial Production figures underperformed expectations. The Index of Services also posted a modest +0.1% increase. Following these releases, the pound is trading slightly lower, and with no additional UK data scheduled for today, we anticipate Sterling will remain on the back foot in the near term.
This content was originally published by our partners at Monex Canada.