Fundamental bias: Neutral
USD/CAD has witnessed a classic short squeeze. Like fellow commodity currencies, the toxic cocktail of Fed hawkishness and Chinese commodity intervention has taken its toll on heavily-backed trades. Yet it looks like the BoC will be well ahead of the Fed in tightening policy and now that the majority of the correction is over, speculators will be looking to reset CAD longs.
Canada’s data calendar is light this week – just April retail sales which are expected to fall 5% month-on-month with Canada in lockdown. We will also see the June release for the CFIB business barometer – which may well retest the highs at 68.2.
USD/CAD has witnessed a classic short squeeze. Like fellow commodity currencies, the toxic cocktail of Fed hawkishness and Chinese commodity intervention has taken its toll on heavily-backed trades. Yet it looks like the BoC will be well ahead of the Fed in tightening policy and now that the majority of the correction is over, speculators will be looking to reset CAD longs.
Canada’s data calendar is light this week – just April retail sales which are expected to fall 5% month-on-month with Canada in lockdown. We will also see the June release for the CFIB business barometer – which may well retest the highs at 68.2.