INSIDE CANADA: CAD Softens With Crude; Macro Names Buy USD DipsVincent Cignarella
USD/CAD +0.28% at 1.2489; CAD drifted lower in European session, following WTI decline below $60/bbl, Bloomberg strategist Vincent Cignarella writes.
- Range 1.2432/1.2494, macro names remain USD buyers on dips while local corporates continue to hedge into USD rallies, traders in London said
- Domestic corporates see Canadian economy, CAD prospects improving; growth pinned to expectations for rebound in business investment and exports, traders in Toronto said
- Expect range bound trading today, with bids below 1.2420 offers above 1.2500, traders in London and Toronto said
- U.S. economic data/events:
- 8:30am: April personal income est. 0.3% vs 0.0% prior; personal spending est. 0.2% vs 0.4% prior
- 9:30am: Fed’s Fischer speaks on financial crisis in Toronto; prepared text, audience Q&A
- 9:45am: May Markit manufacturing PMI est. 53.8 vs 53.8 prior
- 10am: May ISM manufacturing est. 52.0 vs 51.5 prior; ISM prices paid est. 43.0 vs 40.5 prior
- 10am: April factory orders est. -0.1% vs 2.1% prior
- USD/CAD option expiries for today 1.2490 ($600m), 1.2600 ($500m)
- USD/CAD technicals:
- Support: 1.2423 May 28 low, 1.2390 100-DMA, 1.2338 55-DMA
- Resistance: 1.2492 May 27 high, 1.2538 May 28 high, 1.2570 April 15 high
- WTI -70 cents at $59.60, Brent -72 cents at $64.84
- Barclays sees Canadian crude output in May at lowest in 2yrs
- NOTE: Vincent Cignarella is an FX strategists who writes for Bloomberg. The observations he makes are his own. To subscribe to Inside Canada, click here, hit “Display & Edit” and then “Set Alert Delivery”
- Some information from foreign exchange traders familiar with the transactions who asked not to be identified because they are not authorized to speak publicly
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