Forex Investment and Currency Trading

USD/CAD sold off during the Asian session, although not for any CAD-specific reason. It seems to have just been dragged along for the ride, along with NZD, as AUD rallied on growing expectations for a RBA rate hike tonight. USD/CAD hasn’t yet been able to break meaningfully out of the 1.07-1.10 range that we’ve seen for the last several days, although the risk is that it finally pushes through the bottom end of the range now that we’re past the event risk from the G7 meeting. The two key levels we need to break on the downside are 1.0660 (Sept. 22/23/30 Low) and 1.0590 (Sept 17 Low).

Governor Carney and FinMin Flaherty spoke to media over the weekend, but didn’t really say anything new. In fact, Carney still seems to be taking a slightly softer stance on CAD than the BoC had taken this summer, saying only that the strength is a downside risk to inflation. Furthermore, despite the G7 statement, he seemed to justify the volatility in FX markets, saying that we’re at a turning point, and that “asset markets, and foreign exchange is one, are more volatile at turning points because there is a wider range of views about where we’re going.” Lastly, in one more sign of improving domestic conditions in Canada, the latest C-Suite survey of corporate executives showed that 85% expect to see economic growth in the next year, compared to 90% expecting to see contraction in the February survey.