Forex Investment and Currency Trading

Overnight USD/CAD Movement

Asia: Although weakness in crude oil prices sustained a bid tone in USD/CAD overnight, the pair did return below 1.0100 at the North American open as Canadian CPI was stronger than expected. There were no major deal flows noted during the Asian session, with the soft tone in crude oil prices attracting buying interest on dips to the 1.0070 area. Prices ended the session near the top end of the trading range at 1.0085.

London: USD/CAD continued to move higher as the London session began due to broad-based USD strength on the back of the offered tone in crude oil prices. With crude futures down over $2/bl, taking USD/CAD back to the 1.0100 area. Stronger than expected headline CPI for June ((0.7%m/m, cons. 0.5%m/m) caused a quick selloff to 1.0065 as the North American session began, followed by a recovery to 1.0095 again.

Although the headline Canadian CPI number was higher than expected, the core figure was as expected at 0.1% m/m. In addition, today’s print is largely following the path set out in the BoC’s latest forecasts. Hence, there is no need to get overly bullish CAD on these results.