[cppene]

Weaker Canadian employment data and more verbal intervention on the CAD from Finance Minister Flaherty checked the currency’s advance last week, with the bounce in funds aided by the more positive USD tone that developed Friday after the NFP data. USD/CAD had lost a little over 9% in the past month so and last week’s correction, while impressive with the first higher weekly close in a month, makes only a smallish dent in the CAD’s broader progress. With little on the data front today, the markets are liable to remain range bound in the short term; Finance Minister Flaherty and BoC Governor Carney are visiting China this week so off-the-cuff comments on the CAD could be tossed out by either gentleman in response to questions from the press – or just to get their point across about their concerns about the CAD’s movement. Trade figures Wednesday may be the biggest fundamental hurdle for the CAD on the domestic front this week and while another negative print seems likely, the recent rebound in energy prices should provide the CAD with a little short term protection at least. We look for a range-bound market at least initially this week, with the data flow and FOMC meeting later in the week the obvious potential movers for the currency markets. USD/CAD sees short term support in the 1.0780 area and resistance intraday at 1.0855/60 and it may be a struggle to extend significantly either side of that range for the moment.