- Don’t be Fooled by the Pullback in the Dollar Because…. - November 14, 2018
- Rise of the USD – How high can it go with - November 14, 2018
- VIDEO – Targets for GBP, USDJPY and EURO - October 5, 2016
- RBA Meeting Preview - October 3, 2016
- How to Trade the Dollar into the Presidential Debate - September 26, 2016
- Here’s How to Trade the Sept ECB Rate Decision - September 7, 2016
- Bank of Canada September Preview - September 6, 2016
- Will August Payrolls Disappoint the Dollar? - September 1, 2016
- Where is the Dollar Headed this Week? - August 29, 2016
- Will Aug NFPs Help or Hurt USD/JPY? - August 4, 2016
The US trade deficit narrowed materially in the month of November to the smallest since June 2003. Although the narrower trade deficit is normally something to cheer about, the details of the report indicate that the only reasons why trade improved was because of the fall in oil prices and slower domestic demand. The big story is in imports, which plunged 12 percent in November. Unfortunately the strength of the dollar did not drive stronger US demand for foreign goods but it did cut exports by 5.8 percent. The US dollar strengthened following the report but the gains may be limited because the report reflects the weakness rather than strength of the US economy.
Meanwhile Canada is at the brink of turning a deficit for the first time in 10 years. Their trade surplus shrank to 1.3B in November, the smallest since October 1997. The toxic combination of falling oil prices and weaker US demand for vehicles has caused exports to drop 6.8 percent the fourth consecutive month.
Unsurprisingly, USD/CAD has soared the following the better trade report from the US and weaker report from Canada. Expect the currency pair to hit 1.2375 as long as it holds above the 1.2150, today’s low.