Great recovery Yesterday for the loonie, strengthening around 0.70% versus the USD and breaking below the important 1.33 level, to around 1.3250. USDCAD has been driven lately by the risk-off sentiment following all the trade war developments, OIL and recent declarations from BOC Governor Poloz. In that sense, it seems like the market decided to interpret Poloz comments differently Yesterday and now the probabilities for a rate hike in July have recovered all the lost ground from the day before, suggesting Poloz’s would support a rate hike if there are improvements on the NAFTA negotiations.
CAD was also supported by the spike in Oil prices. From a technical perspective, we are still trading on that 1.32/1.33 range, so any break of those will probably suggest further movements. Important to note that we will get another glance at the current economic situation in Canada as GDP and BOC Business Outlook will be released tonight.