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USDCAD breached channel support at....>

DOLLAR-CANADA: USDCAD breached channel support at C$1.3487 on Friday as
highlighted in our analysis email (USDCAD Breaks Channel Base Support -
0901GMT). A combination of firmer oil prices and a broadly weaker dollar has
seen CAD further strengthen to C$1.3356. The 50-dma provides next support at
C$1.3334, a break opens the Dec 12 low & 55-dma at C$1.3323/12, ahead of a run
at the 100-dma & Dec 3 low at C$1.3175/60. CAD has now registered gains of over
2% against the dollar and is the clear outperformer in G10 this year. Morgan
Stanley have recommended selling USD/CAD this morning, with a target of C$1.2800
and a stop at C$1.3650. Canadian spotlight this week falls on the BoC policy
rate decision due Wednesday, with >80% chance of no change priced in by BBG's
WIRP (marginal pricing is for a cut in light of the recent global economic
slowdown worry & speculation surrounding the Fed's monetary policy path), and
only one of those surveyed looking for a hike from the BoC, while the remainder
look for no change. The meeting will include the Bank's quarterly economic
forecasts and a press conference. Elsewhere, Canadian housing starts data is
also due Wednesday, while building permits figures come out Thursday.

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