As the markets have calmed after the Trump-related volatility of the last few days, the Canadian dollar has gained some strength. The Canadian dollar is up for the second day in a row for a total gain of 0.5%. The economic picture emerging in Canada is that of a mixed (and slowing) recovery. For example, the PMI index yesterday showed that supplier deliveries in September had slowed to the lowest level in four months. At the same time, housing starts came in September came in well below the previous month and below expectations, despite the fact that prices continue to rise to record levels. Friday’s employment numbers will further clarify the picture. Still, the USD to CAD rate continues to react much more to global macro events and US political developments than it does to domestic economic data points. The US political scene will be closely watched to see whether a stimulus package is still possible before the election.
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