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CANADA: CAD Bottom Of G10 FX Pack

CANADA
  • CAD sits bottom of the G10 FX pack today following a dovish BoC yesterday (but less dovish than it could have been), political turmoil (albeit limited initial reaction yesterday to the NDP pulling support for Trudeau’s Liberals) and soft US data.
  • Further disappointing productivity data haven’t carried much sway (-0.17% Q/Q non-annualized in Q2 vs cons -0.1. It left productivity averaging -0.9% annualized in 1H24, whilst ULC growth was a strong 4.2% annualized for no clear disinflationary improvement after the 4.3% in 2023.
  • USDCAD at 1.351 trades little changed on the day and has kept to a narrow range, including a post-data high of 1.3524, whilst holding close to yesterday’s low of 1.3500.  
  • It sits between support at the bear trigger of 1.3441 (Aug 28 low) and resistance at 1.3565 (Sep 3 high).
  • Today’s upcoming expiry at nearby strikes is biased higher, with $501m at 1.3630, $705m at 1.3565 and $645m at 1.3515-1.3525. The NY cut lands with US ISM Services. 

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