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Is AUD/CAD on its way to 9500?
Oil put in a massive rally today rising nearly 5% but that still did not prevent the loonie from falling against the Aussie. In the battle of the commdollar kings the Australian vanquished its Canadian counterpart as the RBA kept its rates on hold leaving the Aussie with a G10 leading yield of 2%.
The loonie rallied as well, but its gains have been much more limited as the huge move in crude failed to excite investors. The reason is that the improvement in prices may be too little too late. The Canadian economy is clearly in trouble as today’s Trade data and Ivey PMI suggest and could be in need of further stimulus if conditions become much worse. This Friday the market will get a look at the Canadian data and if the number misses the mark rally in the loonie could come to a screeching halt which could push AUD/CAD higher still as the pair guns for the 9500 level.