Renewed oil weakness weighs on CAD

Traders are buying dips in the greenback as we head to this week’s non-farm payrolls release.

Source: Bloomberg

There were a few releases including pending home sales, personal income and core PCE which surprised to the upside. This helped drive the notion that forward indicators are pointing to an improvement in the US economy. USD/CAD was the biggest mover overnight as traders also digested comments by BoC Governor Stephen Poloz saying falling oil prices would have an atrocious impact on the economy. With crude having resumed its downtrend then we can only assume this is bad news for the CAD. USD/CAD surged from 1.2600 to 1.2700 overnight and is now eyeing March highs in the 1.2800 region. The pair has been in a strong uptrend since November last year and the trend is looking to continue after a month of consolidation around 1.2600. Traders could look to buy the pair at market and target a move back above 1.2800.


Click to enlarge

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.