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USDCAD Briefly Tests Highs As It Shrugs Off Equity Strength

CANADA
  • USDCAD has pulled back after testing Friday’s high of 1.3552, seemingly finding some resistance there before firmer resistance is eyed at the bull trigger of 1.3606 (Feb 28 high).
  • Trading either side of 1.354 sees a consolidation of Thursday’s shunt higher driven at the time by equity weakness.
  • After high sensitivity last week, the pair is mostly shrugging off downward pressure from e-minis increasing strongly on the day.
  • The Can-US 2Y differential at -45.5bps has been trimmed to +2bps higher from Fri vs +3bps after IPPI, aided by softer than expected Canadian home sales (-3.1% M/M vs cons 0.0) but with strong demand on the sidelines limiting the impact.
  • No notable FX option expiry at nearby strikes lined up for after Canadian CPI tomorrow.

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