The Canadian monthly GDP is announced on Wednesday at 15:30 MT time.
Canadian dollar sinks on trade clashes on G7
On Monday, the Japanese yen gained a bit, while the Canadian dollar went down at the beginning of Asia trade after Donald Trump left the G7 gathering ahead of time just to demonstrate his complete dissatisfaction after a verbal clash with Canadian Prime Minister Justin Trudeau.
The Japanese yen is often utilized as a financing asset for more risky investments and it’s prone to ascend when investors' appetite for risk dives. It’s worth noting that by the end of Asia trade, the Japanese yen slumped once again.
The G-7 summit, which is currently taking place Canada, disclosed rather a deep split in trade and duties between Trump and other Western leaders. It’s because the US president neglected a joint communiqué and dared to have Canadian Prime Minister Trudeau accused.
On Saturday, when US leader left the G7 summit on his way to Singapore just to meet with North Korean leader, American President attacked Canadian Prime Minister Justin Trudeau for his milk duties and for criticizing American trade measures.
Apparently, Trump's indignation is built around the fact his country is currently at a disadvantage in global trade. He’s assured that America’s losing out on duties imposed by other nations. However, for many American trade partners, Trump’s criticism sounds quite unfounded, considering that America sets its own duties for everything from peanuts to trucks.
Donald Trump definitely infuriated Mexico, Canada and the European Union by simply setting duties for the import of aluminum and steel. It feels like the final push of the G7 will back financial markets in the face of worries of a global trade conflict.
As a matter of fact, the Canadian dollar headed south abruptly amid soaring concerns that President Trump might break up with the North American Free Trade Agreement soon.
Poor US data, slow vaccine distribution, rising virus cases worsened the market sentiment and underpinned safe-haven currencies like the USD, and JPY.
The European Central Bank will publish the monetary policy statement with the interest rate decision on January 21, at 14:45 MT time.
Joe Biden is going to unveil a Covid-19 relief package of about $2 trillion. After this announcement, the 10-year Treasury yield rose, adding support for the USD.