USD/CAD is at a one-month low after falling for the fifth consecutive day.
A number of fundamental factors have lined up for the Canadian dollar but better growth from its neighbor is at the top of the list. Improved manufacturing and housing data means higher demand for Canadian raw materials.
Better global growth has also driven oil prices to a one-month high and the spread between Canadian and US oil is at the narrowest since October. Finally, Canada’s strong banking industry could benefit from the regulatory uncertainty in Europe.
One caveat is copper, which continues to skid along the recent bottom and is worth keeping a close eye on.
The technicals show USD/CAD falling after the failure to break the 61.8% retracement of the March decline. Support at 1.0180/90 gave out today and that will now act as near-term resistance.
To the downside, support sits at the uptrend since mid-January and the 55-day moving average.
