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OTTAWA: USD/CAD has posted gains in light holiday trade. In the European session, USD/CAD is trading at 1.3880. The Canadian markets are closed for a holiday, and there are no Canadian or US events on the schedule.
Canada’s GDP for October came in at a flat 0.0%, pointing to a lack of economic growth. Although by no means an impressive reading, this was an improvement over the September reading of -0.5%. Core Retail Sales followed suit, also posting a flat reading of 0.0% after a decline of -0.5% a month earlier. There are no real surprises in these weak figures, as the Canadian economy has been hit hard by the steep decline in oil prices, particularly in oil-producing areas locations such as Alberta. This situation has hurt the Canadian dollar, which briefly pushed above the 1.40 level last week, and continues to trade at multi-low levels. The loonie has endured a miserable December, plunging over 500 points against its US counterpart. We are unlikely to see much movement during the last week of 2015, but the Canadian dollar could continue its slide in the New Year.
In the US, November’s durable goods reports were unimpressive, underscoring weakness in the US manufacturing sector. Core Durable Goods slipped by 0.1%, short of the forecast of a 0.1% gain. Durable Goods came in at 0.0%, but this beat the estimate of -0.6%. Housing numbers also disappointed, as New Home Sales dipped to 490 thousand, well off the estimate of 507 thousand. This reading comes on the heels of Existing Home Sales, which posted a weak reading of 4.76 million, its worst performance since April 2014. There was some good news from consumer indicators, as the UoM Consumer Sentiment improved to 92.6 points, above the forecast of 92.1 points and marking a 4-month high.
