Renewed oil weakness weighs on CAD

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

Oil
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.

 

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