* A strong bid tone has developed since we broke back above 1.2575, and having extended the previous 1.2460 base from last year by some 40 or so ticks, we have struggled to improve on this despite the economic fortunes in Canada have been reflected in the data and resultant policy action by the BoC.
* There is however, and once again, the question of how quickly and aggressively the CAD has appreciated in the meantime, and this is in part due to the rate pricing in the market which has suggested 2 more hikes in the year (12 months) ahead.
* The jobs numbers were again strong as in the report released this time last week, but the trade balance was notably wider, and when we see periods of extreme currency appreciation or depreciation, the fundamentals will be affected. This is what we have here now, and the corrective move in USD/CAD is a steady and unrelenting one - as we saw in the moves on the way down, with the bullish BoC tone called into question, the NAFTA talks coming up and Oil prices seen near their upper limits irrespective of the latest inventory numbers.
* USD/CAD dips have shown strong demand in the mid 1.2500's, and more recently the mid 1.2600's, and despite the strong selling interest seen in the 1.2750-1.2800 area, there is little sign of a pullback, which suggests this upturn could have the legs for 1.2900-1.3000. From thereon, data dependency rules - as it always should - and on this note, much of the move from 1.2600-1.2415-20 was based on the May data which was already priced in to the 25bp rate hike.
* There is however, and once again, the question of how quickly and aggressively the CAD has appreciated in the meantime, and this is in part due to the rate pricing in the market which has suggested 2 more hikes in the year (12 months) ahead.
* The jobs numbers were again strong as in the report released this time last week, but the trade balance was notably wider, and when we see periods of extreme currency appreciation or depreciation, the fundamentals will be affected. This is what we have here now, and the corrective move in USD/CAD is a steady and unrelenting one - as we saw in the moves on the way down, with the bullish BoC tone called into question, the NAFTA talks coming up and Oil prices seen near their upper limits irrespective of the latest inventory numbers.
* USD/CAD dips have shown strong demand in the mid 1.2500's, and more recently the mid 1.2600's, and despite the strong selling interest seen in the 1.2750-1.2800 area, there is little sign of a pullback, which suggests this upturn could have the legs for 1.2900-1.3000. From thereon, data dependency rules - as it always should - and on this note, much of the move from 1.2600-1.2415-20 was based on the May data which was already priced in to the 25bp rate hike.