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CANADA: USDCAD Briefly Hits 1.42 For First Time Since April 2020

CANADA
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  • A broad leg of USD strength has seen USDCAD briefly push to fresh cycle highs of 1.4200, through closely packed resistance at 1.4195 (Dec 10 high) and 1.4196 (Fibo proj).
  • A more concerted push higher could open 1.4246 (2.00 proj of the Oct 17 - Nov 1 - 6 price swing).
  • WTI down almost -1.5% on the day and an adjustment the day after the BoC decision sees CAD lag high beta peers.
  • The move sees it 10-15 pips above pre-BoC levels via a low of 1.412 after the Bank cut by 50bps but guided to a more gradual approach ahead.
  • OIS prices ~20bp of cuts for the Jan 29 decision. Analysts are firmly set on another 25bp cut for that meeting with Citi being the exception with a call for another 50bp cut.
  • Can-US 2Y yield differentials hold a 6bp increase from pre-BoC levels albeit to a still historically depressed -120bps.
  • MNI BoC Review: https://media.marketnews.com/BOC_Review_Dec2024_c483e6e8ca.pdf
Source: Bloomberg
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  • A broad leg of USD strength has seen USDCAD briefly push to fresh cycle highs of 1.4200, through closely packed resistance at 1.4195 (Dec 10 high) and 1.4196 (Fibo proj).
  • A more concerted push higher could open 1.4246 (2.00 proj of the Oct 17 - Nov 1 - 6 price swing).
  • WTI down almost -1.5% on the day and an adjustment the day after the BoC decision sees CAD lag high beta peers.
  • The move sees it 10-15 pips above pre-BoC levels via a low of 1.412 after the Bank cut by 50bps but guided to a more gradual approach ahead.
  • OIS prices ~20bp of cuts for the Jan 29 decision. Analysts are firmly set on another 25bp cut for that meeting with Citi being the exception with a call for another 50bp cut.
  • Can-US 2Y yield differentials hold a 6bp increase from pre-BoC levels albeit to a still historically depressed -120bps.
  • MNI BoC Review: https://media.marketnews.com/BOC_Review_Dec2024_c483e6e8ca.pdf
Source: Bloomberg