CAD crumbles on dovish BoC -USD/CAD surged....>

FOREX: CAD crumbles on dovish BoC

-USD/CAD surged through the C$1.34 mark as the Bank of Canada kept rates

unchanged, but seemingly expressed surprise over the extent of the economic

slowdown in Q4. The BoC's uncertainty over the timing of the next move higher in

rates worked against CAD, resulting in CAD joining AUD at the bottom of the G10

FX table Wednesday and touching the lowest levels against the USD since early

January.

-At the other end of the table, SEK trades well following a notice from the

Riksbank that they are reducing their FX reserves (largely for administrative

reasons), but added that the contingency need in FX has "decreased somewhat".

EUR/SEK touched the week's lowest levels of Sek10.4938 on the news.

-Negative equity markets worked in favour of the JPY for much of the session,

but USD/JPY holds just below Y112 with significant option interest remaining at

the handle.

-Focus turns to Australian trade balance & retail sales, the ECB rate decision

and speeches from Fed's Brainard and BoC's Patterson.