The Canadian dollar will be skewed all week by speculation about the Federal budget on Thursday. It’s the first budget since Canada elected a majority conservative government.
No specifics of the budget have leaked out yet but Finance Minister Flaherty has shot down rumors it will be an austerity budget. The latest chatter seems to suggest some measure of near-term pain in favor of longer-term budget savings and growth. On balance, that would be CAD negative.
Technically, USD/CAD looks to have rejected Friday’s push above parity but that’s more of a US dollar story. The Canadian dollar is a mid-performer today, trailing the commodity bloc slightly. I liked USD/CAD shorts on Friday but I don’t see a reason to jump in here unless there is rebound to 0.9960/70.
