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USDCAD Moves Lower After Oil Spike

  • USDCAD has touched new session lows of 1.2676 having earlier stepped lower as oil spiked on the surprisingly large draw on US inventories before a small retracement.
  • This is the low end of the post BOC/FOMC range but remains above the initial support of 1.2650 (Jan 27 and Feb 2 lows), after which it would open firm support of 1.2560 (Jan 26 low).
  • With the pair little changed from levels immediately after the FOMC press conference, higher oil prices have helped offset an increasingly small/negative Can-US bond yield differential.

Initial support of 1.2650 (white line)Source: Bloomberg

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