[Dan]

USDCAD suffered as the BoC turned bearish emphasizing the negative impact of the CAD on growth and its deflationary impact. This pushed USDCAD higher spiking from 1.0267 to 1.0550. Leading indicators continue to give green signals for Canada in September while wholesales were a disappointment but are in any case from August. Railway traffic however with the US suggests that activity in September was quite slow, the Beige book also gave quite a disappointing reading. The move higher in USDCAD was helped in part by a mild correction in oil. However, given that overall sentiments remains bullish as evidenced by VIX reaching again new lows, we should see USDCAD revert to 1.02 relatively quickly though we may have to wait for the MPR report on Thursday.