Oil and Fed tightening likely to weigh on USD/CAD in coming weeks

Oil price declines continue to hurt USD/CAD, and the pair reached 11year low, similar to the decline in oil.

The Canadian data will concentrate on economic activity in coming weeks, after the latest data releases were downside surprises to the market. October's GDP and retail sales will be cautiously watched after last month's negative readings.

"We remain bearish on oil in the short run, as the mismatch between supply and demand seems set to remain. This, coupled with Fed tightening, should weigh on the loonie in the weeks to come", says Barclays in a research note.

December employment report which will come in January should show better results after last month's drop, this was because of winding off of election related temporary employment. Slowing economic activity's renewed signals will likely set BOC meeting platform in January.