A strong Candian Dollar is emerging on the back of elevated crude oil prices and a weakening US Dollar on a soft CPI print for April. Now, the focus will turn to the US/CA 2Yr yield differentials to see if the CAD can make up even more ground. The key risk to further CAD strength appears to be overconfidence on a successful outcome to NAFTA talks and potentially rich pricing in of a May rate hike. May 10 Strong/Weak G8 FX Dashboard ...
The Canadian Dollar rate has fallen across the board after a cautious Bank of Canada aligned with multiple factors that could put further pressure on the CAD. Despite sharp gains last Friday in CAD due to impressive employment gains, the Canadian Dollar rate fell below 1.28 to the USD. Key drivers of Canadian Dollar weakness in global markets a day after the Bank of Canada left rates unchanged were commodities selling off led by metals ...
The Bank of Canada seemed to provide fuel for USD/CAD bulls with the statement that core inflation measures “continue to point to material excess capacity in the economy.” The statement combined with USD strength to stretch the 2-year differentials to their widest in 3-months. Betting against a pair that is showing the steepest yield differential in a quarter is a bet against momentum, which can be painful when wrong. Sticking to the tenet ...
We’ve seen Canadian Dollar strength that is backed by much of the Commodity run and subsequent USD weakness since the Fed hiked in December. However, February has been a sideways affair. I’m awaiting a price breakdown and close below the support levels of 1.3083/76 to validate the view. However, we do see a lot of support at 1.3000 as the price continues to hold up above 1.3000 or find bids. Regarding resistance, the price has had a difficult ...
On Monday, Poloz was speaking at the House of Commons when he mentioned that they would sit on the uncertain (i.e. bad) data and wouldn’t act for 18-months as they digested how the two-way economy was performing. USD/CAD immediately sold off on this news falling ~120 pips in a few hours. What surprised many was when Poloz came out a few hours later to clarify his comments that the market misunderstood. The Bank of Canada governor said the comment about inaction was about the output gap and not a ...
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