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CANADA: USDCAD Nears Bear Trigger, Option Expiry Biased Higher

CANADA
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  • USDCAD has pushed to fresh session lows of 1.3458 with a headwind from equities bouncing off lows seen after a surprising decline in US consumer confidence.
  • It has easily pushed through initial support at 1.3487 and come close to the bear trigger at 1.3441 (Aug 28 low) after which lies 1.3413 (Feb 9 low), widening the gap to resistance at 1.3590 (Sep 20 high).
  • Tomorrow sees heavy option expiry tilted higher, with $1.765bn at 1.3500, $1.06bn at 1.3575-1.3580 and $1.08bn at 1.3600.
  • Still to come, BoC’s Macklem in a fireside chat at 1310ET - text will be made available at 1255ET but, unusually, seemingly with no media lock-up for it.
  • Macklem spoke last week on AI – “AI adoption may add to inflationary pressures in the near term”. Any more typical mon pol comments are likely to stick to recent communication that further cuts can be expected if the BoC’s forecast plays out, but with scenarios for upsizing to 50bp cuts or pausing.
  • In a lighter day for CAD data, one of the more notable developments has been FM Freeland saying Canada is looking at banning Chinese-made software in vehicles as it further ratchets up trade tensions after imposing tariffs of Chinese EVs and aluminium and steel imports. 
Source: Bloomberg
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  • USDCAD has pushed to fresh session lows of 1.3458 with a headwind from equities bouncing off lows seen after a surprising decline in US consumer confidence.
  • It has easily pushed through initial support at 1.3487 and come close to the bear trigger at 1.3441 (Aug 28 low) after which lies 1.3413 (Feb 9 low), widening the gap to resistance at 1.3590 (Sep 20 high).
  • Tomorrow sees heavy option expiry tilted higher, with $1.765bn at 1.3500, $1.06bn at 1.3575-1.3580 and $1.08bn at 1.3600.
  • Still to come, BoC’s Macklem in a fireside chat at 1310ET - text will be made available at 1255ET but, unusually, seemingly with no media lock-up for it.
  • Macklem spoke last week on AI – “AI adoption may add to inflationary pressures in the near term”. Any more typical mon pol comments are likely to stick to recent communication that further cuts can be expected if the BoC’s forecast plays out, but with scenarios for upsizing to 50bp cuts or pausing.
  • In a lighter day for CAD data, one of the more notable developments has been FM Freeland saying Canada is looking at banning Chinese-made software in vehicles as it further ratchets up trade tensions after imposing tariffs of Chinese EVs and aluminium and steel imports. 
Source: Bloomberg