They say when the US sneezes Canada catches a cold. It would seem that the current crop of ‘loonie’ trader’s wish that could be true. If it were, it certainly would make trading the CAD more interesting. Instead, the market is offering up daily tight trading ranges and ‘cut and paste’ market copy. Do not expect it to change so deep in the holiday season. We should expect the outlier trading spikes to be fuelled mostly by illiquid trading conditions.
So far, the CAD has managed to give back all of the previous nights gains and trades somewhat flatline heading into the weekend. With the loonie continuing to have strong ties with US fiscal cliff discussions, any sense of a setback in negotiations and the CAD is dropped like a hot potato for the regular safety of the USD.
The “fright flight” of the loonie tends to be short lived because of the relative hawkishness of the BoC and the currency’s perception as a “Tier II” safe haven.
Dealers expect potential M&A activity to limit the ‘Big Dollars’ allure along with cash interest to own the loonie at better levels. The remainder of this month has the potential to be a ‘logical’ write off with outlier activities expected to dominate.
- USD/CAD Little Movement as Eurogroup gives nod to Greek aid
- US Claims At 9-Week Low
- OPEC hold Oil Production Target at 30M barrels a day
- US Labor Organization Backs EU-US Trade Deal
- Analysts Perceive Europe to be Better than US because of Fiscal Cliff
- BoC Carney Proposes Changing Central Bank Targets from Inflation to GDP
- Obama and Boehner Meet for Budget Talks
- USDCAD Dec 13 – Boxed in Narrow Range after Q4 Announcement
- Jobless Claims Decline in U.S. and Retail Sales Rebound
- Free Debt for US Treasury Says Gross
- Bernanke Moves into Uncharted Policy Territory
- US Fed Declare that Jobs, Inflation are Both Connected to Rates
- Consulting Firm Advises Europe to Adopt Dual Currencies
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.