AUTOREFRESH 
USD/CAD jumps but seasonal flows may limit gains
By Jamie Coleman || July 23, 2010 at 13:40 GMT
|| 6 comments || Add comment
On the 25th of every month, Canadian oil and gas consumers in the US settle their bills with Canadian producers in Canadian dollars. Since the 25th is a Sunday this month, most of the flows will occur today. Expect some of that USD selling to slow the rally in USD/CAD. The greenback has rallied across on a case of last minute stress-test jitters. USD/CAD is at 1.0405 from 1.0435 session highs.
Jamie,
Very useful information, I am long and was wondering why it does not rally more… Given weak CAD figures today (Core CPI) and yesterday (Retail sales)…
Do you know any other seasonal flows we should be aware of?
I also remember the EUR/GBP flow at month end on here.
Thank you.
There are seasonal repatriation flows back into Japan at the end of the fiscal year March 31 and the end of the half-year Oct 31…A little jammed now, but that is the most high-profile seasonal factor the market deals with year after year…
[...] is easing once again after a spike on the first wave of stress-test skepticism. Seasonal selling has helped underpin the Loonie in light trade, dealers say. We’re now at 1.0392. Share [...]
CAD/USD Jamie, Could you explain how oil contractsettelments affect the price. Do they buy CAD to settle the contracts since oil is priced in USD? Please explain like you are talking to a 5 yr old.
Thanks,
Jeff
Jeff- The Canadian producers and the US consumers are settling accounts. Ultimately, the Canadian [producers need to covert proceeds into their home currency to pay the lights, the phones the corporate jets, strippers, all that sort of stuff…
Thank You. So they are buying CAD with the settlement dollars.and putting pressure on the dollar at the same time since they send most of the oil to the USA.