November 06, 2023 17:01 GMT
Wider CAN-US Yield Differentials Likely Weighing On CAD Today
- USDCAD at 1.3665 is seeing a slight unwinding of the earlier rise to 1.3684, itself having come after lifting off a low of 1.3629 which cleared support at the 50-day EMA of 1.3639. A resumed move lower could a trendline support at 1.3570 drawn from the Jul 14 low.
- Looking more broadly, the typical drivers for recent moves in USDCAD don’t warrant the intraday lift today. The S&P e-mini maintains particularly narrow ranges to consolidate Friday’s post-payrolls gain and WTI is currently +1.5% to retrace some of Friday’s slide.
- One factor potentially carrying more prominence is a further drift wider in CAN-US yield differentials, at -49bps for the 2Y and -85bp for the 10Y.
- Released late Friday, CFTC data showed a fourth consecutive month for CAD net shorts, at least in futures space, at -25%. It compares with -38% for AUD and -22% for NZD.