A bit quieter in oil today
USD/CAD is at the lows of the day, down 10 pips to 1.3446 as oil prices rebound.
WTI is trading at $63.61 after falling as low as $62.46. Crude fell more than 4% on Friday after Trump called on OPEC to ramp up supply so the US could squeeze Iran.
The Canadian dollar held up well on Friday despite the drop in oil prices and it's doing the same today. It all suggests that more bad news might be priced into the loonie than warranted. Here's a one-hour chart:
I think the Bank of Canada has really locked itself into holding rates by forecasting just 1.2% growth this year that's 0.4-0.5 pp below consensus and leaves them plenty of breathing room before they even have to contemplate a move. Poloz speaks this week in parliament so we might get a bit more clarity then.
At the same time, the corporate world isn't exactly smiling on the loonie. Last week Imperial Oil said it was cutting investment in Canadian crude this year despite the rebound rebound. Today, Canadian coffee giant Tim Horton's also reported domestic same-store sales down 0.4% compared to 2.0% expected. That shows a bit of strain on the consumer.
