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Canadian Dollar, USDCAD and EURCAD Talking Points: CAD and Oil: The Canadian Dollar and Oil Price Correlation Canadian Dollar Outlook The Bank of Canada (BOC) last week delivered its fourth outsized rate hike since March, with a further 75bp following July’s 100bp hike. According to the BOC, a further softening in household demand is required to bring inflation under its target rate. The effort to frontload rate hikes did see the CAD enjoy some strength. Since then, we have seen the resumption of CAD weakness across the board with both USD and the Euro gaining. Given the FOMC meeting next week there is a strong possibility for a bit of respite for the Canadian Dollar should the Fed outlook be less hawkish than expected.Given the shifting sentiment and particularly with the FOMC ahead it is not wise to be married to any long-term bias at this stage. TECHNICAL OUTLOOK USDCAD Daily Chart Source: TradingView, prepared by Zain Vawda From a technical perspective, USDCAD has been on a steady upward move since its YTD low around the 5th April (see chart). We have also broken out of an ascending channel we have been trading within since September 2021 as the […]
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