It would appear that the political challenges across the Atlantic are helping the greenback, which took advantage of the past two days to regain lost ground against most of the major currencies. For example, a U.K. retail sales indicator saw a dip of 0.6% in December, which appears to show that Brexit has led to more cautious consumers. The pound sterling was trading at its lowest level in the past two weeks this morning. The story is more or less the same with the euro, which is down sharply on Marine Le Pen’s nationalistic comments over the weekend. It remains to be seen whether upcoming announcements from the White House allow the U.S. dollar to sustain these gains.
This morning, we’ll be keeping an eye on Canadian and U.S. trade balance data for December. In Canada, markets anticipate a second straight month with a positive balance (+0.2 billion), as the benefits of a weak currency are finally being felt. In the United States, a deficit of 45 billion is expected, which is stable, but still considerable.
- Range of the day: 1.3100-1.3225
Xavier Villemaire