Expected USD/CAD Range: 1.066 – 1.073

Update: The Canadian Dollar continues to be whiplashed in choppy markets resulting from the low liquidity of the holidays. The loonie is now at 1.070 and right around where we closed last week. Trading is generally listless and directionless as there is little economic data on the agenda for the next several days. While we did break through the 1.070 level on Friday there is little conviction in the trading in either direction.

The Big Picture: The Bank of Canada remains cautiously optimistic on the Canadian economy but dropped its tightening bias in October. Indeed, at the moment, the primary concern of Governor Poloz seems to be inflation rates that are well below the Bank’s 2% target and the …

Expected USD/CAD Range: 1.065 – 1.070

Update: In light of the holiday schedule, while the markets are open today, trading volumes are thin and therefore pricing not particularly reflective of any fundamental developments. However, a few broad themes stand out; US Dollar weakness and EUR strength. The greenback is weaker against all major currencies except the Japanese Yen and the Canadian Dollar. Despite overall USD weakness however, the loonie is even weaker and trading at its lowest in about one week (1.066). The euro moved up due to comments from an ECB council member potentially foreshadowing higher rates.

The Big Picture: The Bank of Canada remains cautiously optimistic on the Canadian economy but has dropped its tightening bias since October. Indeed, at the moment, the primary concern of Governor Poloz seems to be inflation rates that are well below the Bank’s 2% target and the …

Expected USD/CAD Range: 1.065 – 1.070

Update: With the nearly year-long taper debate behind us and with little economic data to go, this morning’s prints seemed to confirm the two obvious themes in the market. The US economy is humming (GDP above consensus) and the Canadian economy is operating at lower than optimal inflation rates. The Canadian Dollar reacted somewhat violently to the news and gave up half a penny. The impact seemed to be temporary though and we are now back at yesterday’s closing levels of 1.068. The loonie seems to be holding on to the 1.07 level with some surprising tenacity despite the negative data.

The Big Picture: The Bank of Canada remains cautiously optimistic on the Canadian economy but has dropped its tightening bias since October. Indeed, at the moment, the primary concern of Governor Poloz seems to be inflation rates that are well below the Bank’s 2% target and the …

Expected USD/CAD Range: 1.066 – 1.072

Update: The Canadian Dollar is now comfortably around the 1.070 level, the weakest level in about three years. Yesterday afternoon, the FOMC began the process of reducing its extraordinary monetary stimulus program. The Fed also announced that short-term interest rates would stay low long after the bond-buying program ends. This first step of the taper is small (5bn from each of the two programs) and the Fed went out of its way to indicate that its future path would be data dependent. The market reaction was somewhat limited but the Canadian Dollar did trade down about a penny to its current level.

The Big Picture: Canada’s new central banker is cautiously optimistic about the economy but shows no inclination towards raising rates in the next several quarters. In fact, the low dollar policy being pursued by the bank suggests …