The Canadian dollar is facing downward pressure due to a confluence of factors including weaker domestic economic data, falling oil prices, and a stronger US dollar. Recent economic indicators suggest a slowdown in Canadian growth, while easing geopolitical tensions are contributing to a decline in oil prices, impacting Canada’s terms of trade. Meanwhile, the US dollar is gaining strength.
- The Canadian dollar weakened past 1.36 per US dollar.
- Canadian GDP was flat in November.
- Goods producing industries contracted for a third time in four months.
- Manufacturing weakness is ongoing.
- Oil prices slid toward the low $60s per barrel.
- The USD/CAD pair trades in negative territory near 1.3660 during the early Asian session on Tuesday.
- Another US government shutdown undermine the US Dollar against the Canadian Dollar.
These combined influences paint a picture of a currency facing headwinds. The softening domestic economy, coupled with external pressures from the commodity market and a stronger US dollar, suggests the Canadian dollar may continue to experience downward pressure in the near term.