On any days with with equities 0.5% lower and oil down 4%, it’s a safe bet that the Canadian dollar in the red. That’s also true today but only barely. USD/CAD is up just 6 pips to 1.3333. after rising to 1.3401 and then giving it all back. The divergence between oil and the loonie is unusual but it’s been a theme in the past two weeks. Crude is at the lowest since October 3 but the loonie isn’t far off from the best levels since Sept 16. That speaks to a market that’s struggling through short-term worries around China, covid and global growth but is increasingly optimistic about a peak in Fed rates. I’ve highlighted the head-and-shoulders pattern in this chart and today’s reversal underscores the case. The market is pricing in a 70% chance the BOC only hikes 25 bps on Dec 7 with the remainder on 50 bps.