The Canadian dollar is up 0.3% this morning as oil hovers around recent highs and equities look to trade up modestly this morning. US weekly jobless claims came in better than expectations as the long slog to economic “normalcy” continues. The markets are quieter than usual as we come out of a Canadian long weekend and approach the US long weekend. USD to CAD seems to have found a level between the 1.20 and 1.21 and has been trading roughly in that range for the last week. Investors continue to consider whether the Federal Reserve is edging closer to talking about tapering its asset purchases. In that vein, traders will be closely monitoring U.S. inflation data this Friday. Fed officials have consistently downplayed concerns about inflation leading to sooner than expected tapering of monetary stimulus but markets reacted quite strongly to higher than expected inflation a couple of weeks ago. So, if we see inflation data well above expectations tomorrow, we could see a move up in the US dollar. Canadian inflation figures will be released on Monday.
