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USDCAD Lower On Equity Gains, Daly Comments

  • USDCAD continues to whipsaw lower in the NY session, with month-end volatility on top of an underlying move from equities gaining ground.
  • There’s been a 40pip dip since SF Fed’s Daly (non-voter, dove) started speaking: not comfortable with high inflation, I do see rate increases as early as March… but… have to be gradual and not disruptive... 4 hikes in 2022 "quite a bit of tightening".
  • At 1.2685, it’s through Friday’s range but off initial support at 1.2649 (20-day EMA) and firm support of 1.2560 (Jan 26 low).
  • Latest speculative positioning for the week ending Jan 25, i.e. just prior to the BoC and Fed, had shown growing CAD longs to the most bullish since Jul’21 but this was likely shaken up by the hawkish Fed turn.
  • Further Fedspeak from George (2022) at 1240ET and Barkin (non-voter) at 1500ET. BOCspeak not until Wed, primarily with Macklem and Rogers speaking at the Senate Committee.

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