The Canadian dollar is lower on Wednesday. The loonie is lost 0.38 percent versus the USD as lower oil prices and higher U.S. yields put downward pressure on the currency.
The IMF did not cut the growth forecast for Canada, in fact mentioned that the USMCA might boost growth. The loonie has been riding the trade agreement wave, but the market is now focusing on fundamentals.
Returning form the Thanksgiving holiday, CAD traders have seen housing starts and building permits come in lower than expectations. The Bank of Canada could hike rates in October, but economic data has to prove that the economy can take it.
Although the USMCA is a big positive for the loonie, the agreement is not final as politicians in all member countries need to ratify the agreement and with mid-terms in the U.S. and a looming federal election in Canada next year, there could be some obstacles ahead.
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