USD/CAD 25 pips higher on the day
USD/CAD continues to trade in lock-step with oil this week. Crude is down 1.8% today and that’s sent USD/CAD a quarter-cent higher to 1.3078.
Canadian crude producers are fairly comfortable above $55 per barrel, especially with the WCS spread at $9.10 but investors have been cleaned out by oil-stock volatility in the past year and prices and investment are deeply depressed. Many in the sector are hoping for a change in government in October with polls showing a neck-and-neck race.
USD/CAD fell to the lowest since October last week as oil prices rose above $60 but the pair failed to break below 1.30 after a +400 pip move.
The downside is intriguing but the fresh questions about US-China talks are a concern and that’s also reflected in oil. One weak pillar of the Canadian economy has been the consumer. Tomorrow, StatsCan reports on May retail sales. The consensus is +0.3% for the headline and +0.4% for ex-autos.