The USDCAD exchange rate could see movement in the coming weeks as Prime Minister Justin Trudeau faces a no-confidence motion.
USDCAD – Daily Chart
The price of USDCAD has soared since October as investors consider the possibility of trade tensions between China and the US under Trump.
The Atlantic Liberal caucus in Canada is now calling on Prime Minister Justin Trudeau to step down as party leader. Following an Atlantic Liberal caucus meeting the morning of December 23, chair Kody Blois wrote a letter to Trudeau.
“The discussion this morning centred around the need for you to resign as the Leader of the Liberal Party and to urgently allow for a process to determine a new leader to replace you,” wrote Blois to Trudeau.
Possible trade tensions and Donald Trump’s threatened 25 per cent tariff on Canadian goods exported to the US, and the opposition parties saying they would support a vote of non-confidence in the new year, are reasons for urging Trudeau to go.
Trudeau has been in charge since November of 2015 and many are seeking a change of path for Canada. Monday saw mixed data from the US with December MNI Chicago PMI unexpectedly falling -3.3 to a 7-month low of 36.9, weaker than expectations of an increase to 43. Pending home sales rose by 2.2% over the month, which beat expectations.
Low volumes and thin holiday trading conditions may see some exaggerated moves in different assets. The markets are now awaiting Friday’s December ISM manufacturing index for direction and to assess the health of manufacturing. Expectations are for the ISM Manufacturing Index to slip by -0.2 to 48.2.
Traders are now discounting the chances at 11% for a -25 bp rate cut at the January 28-29 FOMC meeting after Jerome Powell took a hawkish stance at his latest monetary policy meeting.
