Yesterday’s Bank of Canada Business outlook continues to carry over into today’s market. Analysts are still digesting the numbers, however, the key point is that this was done just before the free trade agreement was done. Oil prices remain steady, again the story is what is going to happen with Saudi Arabia? No country has come out with any harsh criticism, and Saudi Arabia has vowed to use its oil production as a weapon, markets remain nervous.
USD-CAD has settled near 1.3000, below the three-week high that was pegged last week at 1.3070. There have been mixed forces acting on the pairing, with the U.S. yield advantage of the Canadian yields having eroded in recent sessions, while last week’s 5%-plus dive in oil prices this week took a toll on the Canadian Dollar, though crude markets have now appeared to have found a footing. On balance, we favour the upside in USD-CAD. The pair has support at 1.2893-95. Both the U.S. and Canadian calendars are devoid of top-tier releases today.