USD/CAD falls to 1.3125
The Canadian dollar continues to climb.
It's all about interest rate differentials with the Bank of Canada likely sidelined as others continue to cut and hint at cutting. The moves got a second wind today with WTI crude oil prices up nearly 3% following a large unexpected draw in US inventories.
The CAD gains come despite fresh bans on Canadian meat exports to China. The block is another sign of trouble for Canada after detaining Huawei's CFO for extradition to the US.
The major risk for the Canadian dollar bulls this week is the Canadian GDP report on Friday. The consensus is a 0.2% rise but risks are slightly tilted to the upside after yesterday's inventory data strongly beat estimates.
Technically it's going to be tough to break below the Feb/Jan lows with that looming and the G20 to come.
