From the FXWW Chatroom: CAD continues to strengthen here and in truth is the only G10 currency to be making a move on what is supposed to be a quiet day for North America. Making the most of absenteeism below the border, CAD is charging off.
The FT is somewhat lazily pointing towards the Poloz interview in Handelsblatt, but that came out hours ago (06:00 BST) and is unlikely to be the cause of this latest move. Poloz’ hawkishness was already pretty much a given: Citi Economics moved their call to a 25bps hike in both July and October last week in this piece: BoC Monetary Policy Preview – Hike for Credibility’s Sake*.
Earlier, Manufacturing PMI was slightly lower than it was in May, but still solid at 54.7 (vs. 55.1 previous)
WTI helped the move a little with a small jump and is now at $47.27 (up almost 0.45% on the day).
But the Technical picture is perhaps the most astute: with those small details above combining, USDCAD dipped below 1.2947 – the low after Friday’s GDP print – once we clocked below there, CAD began to hurtle lower; 1.2942 was a break of the downward trendline of the move lower from 1.3800. As things stands, Loonie is at 1.2937 (the low earlier was 1.2920). Below here, stands the abyss: 1.2825, 1.2655, 1.2460 are the big levels way down below.
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