USD/CAD has shed 13 pips and last.....>

DOLLAR-CANADA: USD/CAD has shed 13 pips and last trades at C$1.3187. The rate

extended losses upon the breach of C$3192/91, the lows of y'day/Nov 19.

- The rate sold off sharply yesterday and finished 95 pips below the neutral

levels after rejecting the Nov 19 low of C$1.3191. The drop was driven by a

combination of BoC action and a surge in oil that filtered through into CAD. 

- Canada's central bank stood pat on policy, but was surprisingly upbeat in on

the domestic economy, highlighting that inflation metrics are consistent with

the economy running "near capacity." Meanwhile, a larger than expected draw in

U.S. crude inventories reported by the DoE put a bid into oil prices.

- The downside attention is drawn to C$1.3172, the low of Nov 8. A break here

would expose the 61.8% retracement of the Oct 29 - Nov 20 rally at C$1.3151.

Meanwhile, bulls need a return above the 50-/100-DMAs at C$1.3218/28 before

targeting the Nov 14 high of C$1.3271.

- Looking into the local docket, trade balance and comments from BoC Dep Gov

Lane are due later today. Lane will present the Economic Progress Report. Labour

market data will be published on Friday.