April is the worst month for USD/CAD

April will be all about NAFTA negotiations for the Canadian dollar. With the Mexico election campaign about to ramp up, leaders from all three countries have decided on a deadline for the start of May. That doesn't mean a deal has to be completed by then, but enough progress has to be done to put talks on hiatus until after the July 1 vote.

Whatever happens will mean a big move in CAD and MXN and that's going to be the trade. However, there is an opportunity for a bounce in the Canadian dollar (i.e. a drop in USD/CAD) in the short term after a quick move to 1.31 from 1.23 in early February.

One of the reasons, is that the seasonal pattern for this pair is highly negative in April. In the past 12 years, it's fallen 10 times in April and in the past decade, the average decline is 2.45%. It's by far the worst month for the pair.