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CAD Narrows Underperformance Post US Open

CANADA
  • USDCAD extends a move lower since the US cash open as WTI also tests ytd highs, touching 1.3172
  • CAD continues to lag other high beta peers on the day although has closed the gaps slightly (currently +0.5% vs the USD vs +1.0% in the case of AUD).
  • Whilst very much lower tier, local data have shown some resilience with consumer confidence holding up well after the latest pair of BoC hikes and construction prices rising 1.9% Q/Q in Q2 for 7.5% Y/Y, or 13% Y/Y specifically in Toronto. Builders across 11 major markets cited problems finding workers, rising wages and higher costs for materials such as concrete.
  • Support is seen at a bear trigger at 1.3093 (Jul 14 low) whilst resistance is seen at the 50-day EMA of 1.3286.

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