USD/CAD hits session high

USD/CAD has taken out the early Asian highs and at 0.9960.

Sometimes this pair is slow to react to news until the Canadian banks get up and running. I haven’t seen anything to suggest today won’t be a bloodbath in the Canadian stock market after the Petronas bid was blocked.

Even if the Nexen deal is eventually approved, the foreign investment climate in Canada is now damaged. To me, it’s a major USD/CAD buy signal.

Author: Adam Button

Adam Button is the editor of ForexLive™. He was previously the chief currency strategist at XForex and has also worked with Intermarket Strategy. Adam believes deeply in the value of knowing every tidbit of news. He has a background in journalism and was formerly the head of the markets team at the Canadian Economic Press. He is a graduate of Ryerson University and completed Level 1 of the CFA program. Adam lives in Montreal, follow him on Twitter: @FX_Button.

16 Comments

  1. Hi Adam, could you tell me the next strong resistance it will run into plse? thx Amanda

  2. Hi Adam, what do you think for tomorrow? cut rates? keeping it at 1.00%..?

  3. Nothing until parity, Amanda

  4. No chance of a rate cut tomorrow, Alex. The question is about changing the language and I believe they will shift to a neutral stance, which is USD/CAD bullish.

  5. Thank you Adam.

  6. Hi Adam
    What’s behind the governments move on this and the previous blocked BHP deal? Is it just protecting Canada’s interests? They had the Investment Canada act but there still seems to be a lack of detailed knowledge on it.

  7. It’s very vague, HMR. The government can block anything they they doesn’t provide a ‘net benefit’. They haven’t explained anything.

  8. The correlation between the CAD and Canadian equities isn’t what you’d think, it’s pretty loose. It’s damn tight to the SPX however.

    Canadian gov’t has come out and said the Petronas/Progress decision can’t be taken as a guide to the Nexen deal.. but it obviously sours the mood for foreign investment..

    Think we’ll be seeing parity today Adam? I’m liking the idea of a USD/CAD long, but have missed the meat of this initial move.

  9. GM Adam, Just for clarification as to what you are thinking. you say USD/CAD buy signal? If you mean sell the CAD that would mean to short the USD/CAD pair which is buying USD? I am a little confused as to what you are really saying.

  10. Yes, sell CAD = buy USD/CAD. I’m saying to avoid CAD this week. Lemme re-jig it.

  11. OK strike that last comment, I got it now. Had to get my head skrewed on right first.

  12. Maybe they feel strongly about Canadian companies selling themselves lock stock rather in part. It’s certainly not been a net benefit to us in the UK when the floodgates opened to foreign takeovers.

  13. ‘The gov’t’ hasn’t come out and said it. One guy did and Canada’s govt works like a dictatorship. Any way you look at it, the chance of the Nexen deal and other investment has taken a significant hit.

  14. Welcome to my life, scjohn. USD/CAD is always backwards. I wish it was quoted like AUD and NZD.

  15. I must remember, buy means 1st currency of pair is accumulated, short means 2nd currency of the pair is accumulated.

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