There is lots of talk in the market that a Canadian corporate has failed or will fail to make payment on a $1 bln forex deal. This would require the bank on the other side of the transaction to enter the market to replace the trade. Rumor has it that the bank would have to sell $1 bln to cover the failed payment.
Given the price action in USD/CAD, the selling may have already taken place. The bigger story than the one-off flow would be the bankruptcy of a big Canadian corporate, which would likely undermine the CAD a bit if it turns out to be true.
USD/CAD trades at 1.0970, the lowest levels since October.
