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100bp Hike Counts For Amazingly Little For CAD

CANADA
  • With the BoC press conference over after the BoC surprisingly hiked 100bps, USDCAD sits -0.6% at 1.2947 but CAD only marginally outperforms AUD and NZD and lags SEK and NOK on growing dollar weakness through the session.
  • Heavy focus on the decision to opt for 100bps as part of front-loading has seen front-end Can-US yield differentials firm back towards recent highs at +20bps with the long-end relatively little changed at 23bps, providing relatively little fresh impetus for the pair.
  • With an earlier low of 1.2937 the pair came close to testing support at 1.2936 (Jul 8 low) and the 20-day EMA of 1.2928 just below. A clear break here would open the 50-day EMA at 1.2853.

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