USD/CAD hits session high despite oil jump
It's shocking to see USD/CAD higher today.
The US dollar is broadly softening in North American trading and WTI crude has been on a one-way run higher. In addition, it's the time of month when you generally see Canadian oil settlement flows and the latest numbers showed a surge in Canadian sales.
I guess what's driving it is the follow-through from the weak Canadian inflation and retail sales numbers on Friday.
There are two ways to take it. 1) That CAD is so soft that oil can't cushion it, so when oil goes down, the loonie will fall even harder. 2) That there is some kind of flow going through the market that's skewing CAD for the moment, but it won't last.
I'm partial to the second explanation but I don't like betting on the US dollar, or oil.
