USD/CAD recap for 16.09.2015
With this recap I want to start with some notes from BOC's (Bank of Canada) Cote.
She states: Current CAD level consistent with historical relationship with oil and lays out several points:
- Falling oil prices have reduced Canadian incomes
- After contracting in H1, Canadian economy expected to expand in H2
- Exports that are more sensitive to CAD have regained momentum
- US economy activity expected to accelerate
- Inflation is expected to return sustainably to 2% in H1 2017
The moves: Broad US dollar weakness, WTI crude ripping up 2$ (nearly 6%), better risk appetite with the S&P500 up and other commodities including precious metals, nickel and copper are higher is all bringing to the rise of the loonie.
The price on the daily finds itself on a very tight formation which is being broken by the price moving down. Yesterday the price opened at 1.32454 moved to a low to 1.31959 and a high of 1.32564 just to close at 1.31714. I suspect that if the conditions above remain, the price will go down as the loonie appreciates, to 1.30596. There is a case of course before that the price moves back up to 1.32983. Still - everything can change from today's FOMC decision.