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Oil costs are down greater than $4 at the moment however the loonie is preserving tempo with the US greenback.
USD/CAD is flat at 1.2919. The excessive final week was 1.3079, which mainly matches the Might excessive and threatens a double prime.
The loonie has held up properly this 12 months largely as a consequence of oil and pure fuel. Phrases of commerce for Canada going forward look robust however a deeply overvalued housing market poses a major threat.
At present, Canada CPI rose to the very best since 1983 in a report that CIBC stated makes a 75 bps hike to 2.25% a ‘close to certainty’, in line with CIBC.
The flip within the loonie coincides with the CPI and bounce in oil to $105.75 from a low of 101.53 but additionally with broad weakening within the US greenback. Fed chair Powell has warned about weakening US demand at the moment and there is a flight to bonds, which might be weighing on the greenback.
General, that double prime is value watching alongside power. The loonie is the second-best performing international forex this 12 months and there are indicators demand is holding up. The housing market is an enormous threat and I believe the highest of this breaks however at the moment’s worth motion is respectable.
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