USDCAD’s better risk sentiment and continued strength in crude oil prices (WTI above $62/bbl and WCS trading near $55, the highest level since last July) are combining to pressure the USD back to the 1.33 area. US-Canada spread narrowing has steadied, however, which may limit the CAD’s ability to extend beyond 1.33 for now, especially as the spot has run a little ahead of our FV estimate, which closed out yesterday at 1.3370 levels.
The domestic data calendar is thin ahead of Friday’s jobs numbers so funds will likely remain a slave to external factors and technical drivers in the short run.
We remain constructive on the CAD but we would rather fade minor USD rebounds than chase the market lower from here at this stage.
CAD trading defensively as post-Fed spread narrowing begins to fade. We maintain our medium-term bearish CAD view, expressed as a one-touch calendar call spread.
We have positions open in -3m/+7m OT USDCAD calendar call spread (k=1.40). Paid 16.6% in mid-January. Marked over 20% so far. Courtesy: Scotiabank
Currency Strength Index: FxWirePro's hourly CAD is at 7 (neutral), the hourly USD spot index is inching towards 106 levels (highly bullish) while articulating at 13:52 GMT.
For more details on the index, please refer below weblink: http://www.fxwirepro.com/currencyindex


2025 Market Outlook: Key January Events to Watch
Indonesia Surprises Markets with Interest Rate Cut Amid Currency Pressure
US Gas Market Poised for Supercycle: Bernstein Analysts
Urban studies: Doing research when every city is different
Bank of America Posts Strong Q4 2024 Results, Shares Rise
Wall Street Analysts Weigh in on Latest NFP Data
Moody's Upgrades Argentina's Credit Rating Amid Economic Reforms
China's Refining Industry Faces Major Shakeup Amid Challenges
US Futures Rise as Investors Eye Earnings, Inflation Data, and Wildfire Impacts
U.S. Stocks vs. Bonds: Are Diverging Valuations Signaling a Shift?
Energy Sector Outlook 2025: AI's Role and Market Dynamics
Lithium Market Poised for Recovery Amid Supply Cuts and Rising Demand
U.S. Banks Report Strong Q4 Profits Amid Investment Banking Surge
U.S. Treasury Yields Expected to Decline Amid Cooling Economic Pressures
UBS Predicts Potential Fed Rate Cut Amid Strong US Economic Data
Goldman Predicts 50% Odds of 10% U.S. Tariff on Copper by Q1 Close 



