Expected USD/CAD Range: 1.048 – 1.055

Update: Something somewhat unusual is going on this morning; crude oil is up 2% but the Canadian Dollar is down 0.3% to 1.053. Well, perhaps not so strange when you consider the dominant theme moving markets today is worries about US military engagement in Syria. The possibility of war is weighing on all risk assets, including the Loonie. With the US public war-weary, the Chinese and Russians opposed and the evidence of blame for chemical weapons use still murky, we view these worries as overstated at the moment.

The Big Picture: The commodity boom has seemingly ended (or is at least sputtering). Relatedly, Chinese and other emerging market economies have …

Expected USD/CAD Range: 1.048 – 1.055

Update: After a tumultuous week of almost relentless US Dollar strength, we are entering the last week of the summer with the Loonie at 1.050. This morning’s weaker than expected economic data (Durable Goods Orders at -7.3% vs consensus of -4.0%) will continue to fuel the debate as to whether fed tapering begins in September, and if it does, the form and extent of such a move. We have been and continue to be long-term USD bulls (see below). However, with the 2% move last week and the market now so fully convinced of imminent monetary tightening by the Fed, in the short term, it might be time to consider “selling the news” and past the time to “buy the rumor”.

The Big Picture: The commodity boom has seemingly ended (or is at least sputtering). Relatedly, Chinese and other emerging market economies have …

Expected USD/CAD Range: 1.053 – 1.059

Update: The Canadian Dollar is lower for a sixth day in a row and trading at its lowest level in six weeks. While most of the recent move has been due to a broad demand for the US Dollar, in the last couple of days we are seeing some selling specific to the Loonie, probably due to mild inflation figures released this morning and weak retail sales data from yesterday. The Loonie is now trading at 1.055 and down nearly 2% this week.

The Big Picture: The commodity boom has seemingly ended (or is at least sputtering). Relatedly, Chinese and other emerging market economies have …

Expected USD/CAD Range: 1.047 – 1.054

Update: The US Dollar continued to make broad gains against most major currencies both before and after yesterday’s release of the FOMC minutes which seemingly confirmed that tapering is coming later this year. The Loonie is now trading at 1.051 and down 1.6% this week. There is quite a bit of focus on rising government bond yields which in some cases are at multi-year highs and coincide with news that RBC is raising its mortgage rates. As Bloomberg reports today, rising bond yields and the falling Loonie are creating exactly the kinds of conditions that the Bank of Canada was looking to create by moving the economy away from domestic spending towards export-led growth.

The Big Picture: The commodity boom has seemingly ended (or is at least sputtering). Relatedly, Chinese and other emerging market economies have …