C$/U$ Update

  • The Canadian dollar finished last week little-changed versus the U.S. dollar as CAD/USD last traded at 0.829.
  • The Canadian dollar remained firm, especially versus the U.S. dollar, as the price for crude broke higher. The Loonie also shrugged off Canada’s weak May employment report as the U.S. report was deemed even worse.
  • The Bank of Canada is still the only major central bank to hint at potentially withdrawing monetary policy stimulus, now likely bolstered by recent progress in vaccine rollouts. At the same time the U.S. Federal Reserve continues to reassure investors that inflation readings are ‘transitory’ and that the central bank’s accommodating policy will remain unchanged for the near future. This angle is further reinforced by the recent batch of mixed U.S. economic data.
  • Technical analysis suggests that the scope for further upside for the Canadian dollar (downside for USD/CAD) might be limited.





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