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Small Break of Support Ahead Of Expiries Tomorrow

  • Dollar weakness saw USDCAD break through the initial support of 1.2650 (Jan 27 and Feb 2 lows) earlier with a low of 1.2636 before pulling back to ~1.265 again.
  • It has since moved lower again to 1.2645 but whilst next support is eyed at 1.2560 (Jan 26 low), large option expiries tomorrow could see it hold higher with $4.76bln rolling off through C$1.2650-60 (of which $3.3bln is at 1.2650) and a further $1.7bln through C$1.2680-85.
  • Potential drivers: Limited Canadian drivers barring further protest disruption, whilst on the US side, Richmond Fed’s Barkin speaks late today (1900ET) followed by the U.Mich preliminary Feb survey tomorrow.

Source: Bloomberg

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