Yesterday, USD/CAD rose to the highest level since April. Today it’s down to the lowest level since July.
The selling started on the break of the 200-day moving average and is now through the 100-dma and the August low.
USD/CAD daily
Yesterday I suggested selling GBP/CAD on the break of the 200-dma and the May low. That pair is now testing 1.8000.
Overall, nothing much has changed in the Canadian dollar landscape. The hype about the BK/Tim Horton’s deal is overdone. Canada isn’t an offshore tax haven and there will be no rush for companies to invert and move to Toronto. I get the sense that hedging flows, month end flows and technicals are the biggest part of the loonie rally today. That’s not the stuff that a long-term rally is built on.
