CAD Gains on Speculation of Trudeau's Exit Amid Leadership Discontent

Today's expected range for the Canadian Dollar against the major currencies:

US Dollar        1.4220-1.4430

Euro                 1.4820-1.5020

Sterling            1.7840-1.8050

WTI Oil (opening level) $74.22

The CAD is opening at 1.4314 ( 0.6986) 

I expect the CAD to move based on the news reports that Justin Trudeau will step down this week. After weeks of discontent with his leadership and the governments direction,which negatively affected the value of the currency. The negative bias toward CAD may have been lifted. 

Headines

·    Canada’s prime minister Justin Trudeau may step down as leader of the Liberal party this week, according to Canadian newspaper Globe and Mail. This would set in motion a contest for his replacement and new elections

·    China's services sector saw fastest growth since May; Caixin PMI rose to 52.2 in December from 51.5 in November, beating the 51.4 forecast. However, new export business fell for the first time since August 2023, indicating cooling foreign demand.

·    S&P Global Australia Composite PMI rose to 50.2 in December from 49.9 in November, with services growing and manufacturing declining. Employment fell, costs rose, and business confidence improved.

·    ISM Manufacturing PMI reported Friday, rose to 49.3 in December, above the 48.2 forecast, and highest since March, supported by a pick-up in demand as new orders rose more than 2 points to 52.5 matching the highest since March 2022. US economic data strength underscore the challenge traders and investors face in deciphering the path ahead for US interest rates after Fed Chair Jerome Powell’s hawkish pivot in December.

·    Currencies: USD strength has ebbed since the big surge on the first trading day of 2025, as US 10y treasury yields pinned near cycle highs.

·    Commodities: Gold and crude slip with USD in focus. Extreme price swings in natural gas.