CAD to Shrug Off Canada Row With Saudi Arabia
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USDCAD price, news and analysis:
- USDCAD remains in a medium-term downtrend and is showing few signs of rallying despite Canada’s dispute with Saudi Arabia.
- Following a small rise in USDCAD Thursday, a de-escalation of the row will likely prompt a fall.
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USDCAD rally likely to be short-lived
USDCAD has edged ahead Thursday but its medium-term decline will likely resume soon as traders shrug off Canada’s dispute with Saudi Arabia. The Middle East nation has expelled Canada’s ambassador to the country and blocked imports of grain from Canada after a Canadian demand that jailed women’s rights activists in the kingdom be released.
However, the Saudi energy minister said Thursday that there will be no blocking of Saudi oil supplies to Canada after the Saudi government said late Wednesday that “neither the government nor the central bank or the state pension fund has issued any instructions regarding the sale of Canadian assets”.
Perhaps surprisingly, there was no responding fall in USDCAD.
USDCAD Price Chart, Daily Timeframe (April 23 – August 9, 2018)
As for the future, USDCAD will likely be influenced more by continuing talks on NAFTA, the North American Free Trade Agreement. Hopes are rising that the US, Canada and Mexico can reach a deal and that should support the Canadian Dollar and Mexican Peso.
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--- Written by Martin Essex, Analyst and Editor
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.