Talk about putting a surprise wrench in the system. I have been fairly bearish
on WTIUSD - Oil. I went short just before the meeting and got out just two days ago. I was looking to go short oil
again. However, oil
and CAD move in lock-step, and there is a very strong correlation between interest rates and oil
prices. Now that the Bank of Canada is raising interest rates, although I am still bearish
, I am going to have to wait to go short again.
CAD will continue to rally, especially against some of the other majors such as EUR and GBP. This move takes CAD out of its deep slumber with the potential to really move. Long term, I see the DXY
, US Dollar Index
, heading lower. This is a very small part of that, EUR being a major part of that.
This is a new shift in the FX markets.