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USDCAD Consolidates Prior Risk-Off Climb

  • USDCAD sees little idiosyncratic reaction to a smaller than expected pullback for Canadian housing starts (255k vs cons 244k, after surging 41% to 284k in June).
  • The pair more generally has steadied yesterday’s climb, but not before overnight touching 1.351 to clear prior resistance at 1.3502 (Aug 8 high) that it had again nudged late yesterday.
  • It next opens 1.3523 (76.4% retrace of May 26-Jul 14 downleg), with yesterday’s increase coming as the slide in the S&P e-mini and WTI outweighed sizeable GoC underperformance to Treasuries following CAD CPI (2Y GoC yields now +1.3bp since the data vs -5.7bps for Tsys).
  • Next up sees wholesale sales ex-petroleum with the flash release seeing consensus at -4.4% after +3.5% in June, along with US housing data at 0830ET.

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