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USDCAD – Back to the Lows?
With the exception of the pound there is perhaps no more volatile major currency to trade than the Canadian dollar. The loonie has been buffeted by the whims and fortunes of crude and as oil has headed towards $50/bbl the loonie is now moving towards its recent swing lows near the 1.2500 level.
However despite the recovery in crude Canadian economy has not been nearly as resilient with recent data showing a slowdown across many sectors. Today’s slip below the 50 boom/bust level in Ivey PMI was only the latest sign that the economy in the Great White North is lagging.
This week the market will get a look at the Canadian labor data due Friday. The market is looking for rebound to 5K from -2K the month prior, but given the slowdown in activity Canadian labor numbers could show another contraction which could offset any further gain in oil and keep USD/CAD from making fresh swing lows. For now 1.2700 remains key support while 1.3000 is now resistance.