Technical Analysis

Canadian dollar can’t seem to runaway with it

Fits and starts

USD/CAD earlier today looked like it was finally making a definitive break of the late-August rally but a few hours later, it’s 75 pips from the lows and unchanged on the day.

The loonie has been a tough trade in the pandemic and that continues to be the case.

For those looking for inflation coming out of the pandemic, there is a lot to like about Canada given the abundant resources. Relative rates are also a tailwind and the stability of the economy.

There was plenty of noise about a housing collapse at the peak of the virus (including from the Canadian regulator) but with people scrambling for homes everywhere, that’s less of a risk.

In the short term, today’s rebound is a bit of a puzzle but I think USD/CAD eventually gets to 1.30. But something about 1.29 in this environment doesn’t feel quite right.

For bank trade ideas, check out eFX Plus

Articles You May Like

Nov Richmond Fed 15 vs 20 expected
US dollar rides high after surprise jump in economic survey
UK Times says EU Commission President expected to speak with UK PM ‘within hours’ ( … but there’s a but)
US crude oil futures settle at $45.53
USDCAD trades between swing area in choppy trading today

Leave a Reply

Your email address will not be published. Required fields are marked *