Daily Afternoon Report 23.01.2017

The Canadian dollar was little changed against its U.S. counterpart on Monday as the lack of economic policy detail in U.S. President Donald Trump’s inauguration speech coupled with concerns over his protectionist stance kept investors on the sidelines.

USD/CAD edged up to 1.3333, little changed from Friday’s close.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.21% to 100.58, after touching lows of 100.17 earlier.

The index climbed around 3.5% since Trump’s election win in November, buoyed by expectations that his pledges to cut taxes and hike infrastructure spending would spur growth in the U.S. economy, leading to inflation and a faster pace of interest rate hikes.

But the index has fallen 1.9% so far this month as the lack of economic policy detail, In his inauguration speech on Friday, Trump said his administration would put “America first” and also promised new roads, bridges and highways.

But market sentiment was hit by the negative tone of the speech, which underlined uncertainty over how Trump will govern.

Investors were looking ahead to the first official Trump administration press briefing later Monday, due at 13.30 ET.

The Canadian dollar remained under pressure as the price of oil, a major Canadian export, fell.
Oil prices dropped as indications of a recovery in U.S. oil output offset news that OPEC and non-OPEC producers were on track to meet output reduction goals set in December.

Also Monday, data showed that Canadian wholesale sales grew less than expected in November.

Statistics Canada said wholesale sales rose 0.2% in November, falling short of forecasts for a 0.5% increase.