The Canadian dollar has been on a tear in recent weaks as the reflation trade combines with pronounced weakness in the Big Dollar to boost the Loonie . The Canadian dollar is broadly in line with economic fundamentals, the IMF staff says in its annual report on the Canadian economy. Canada’s proactive response to the downturn better places it to weather the global financial crisis though the near-term economic outlook will be challenging. Risks remain tilted to the downside, the Fund says. Canada has room for further stimulus, if need be, they say.
USD/CAD trades now at 1.1250. Dealers note seasonal monthly demand for CAD today from oil and gas producers. Those flows take place each month around the 25th of the month but that has been pushed up owing to Monday’s holiday.
