USD/CAD down nearly a cent today
Gains in oil, a strong risk backdrop and a softening US dollar put the loonie at the top of the G10 FX field today.
The move broke the recent range around 1.2650 and that’s led to an extension to the downside in USD/CAD. The main hurdles now are 1.2500 and the February low of 1.2468.
The weekly chart highlights the vacuum of support below that and down to the 2018 low of 1.2246 and the 2017 low of 1.2060.
The comments today from Bank of Canada deputy Lawrence Schembri also highlight the downside. He said that the central bank will boost forecasts in April and was careful to add that “in January” they forecast that the output gap wouldn’t close until into 2023. That hints at an earlier date, which the market will take to mean earlier rate hikes.