Too calm on the USD/CAD front?
The brief foray by WTI crude oil below $44.50 immediately weakened the CAD. The movement later reversed, but technically the harm was done and we could see further weakness in crude oil prices in the coming weeks. Sellers, the 1.3000-1.3500 range is within reach. Get your orders ready!
We’ve been used to long periods of low volatility in the USD/CAD pair. We think that upcoming economic data (Canadian Retail Sales and Inflation on Friday) and central bank meetings (European Central Bank this morning and the Federal Reserve in the U.S. on July 27) could serve as a catalyst to drive the pair out of the doldrums.
As previously mentioned, the European Central Bank (ECB) will announce its monetary policy this morning. The situation in Europe is difficult, with economic troubles in certain member nations, such as Italy, the Brexit vote and terrorist attacks, and calls for concrete actions. ECB President Mario Draghi’s press conference begins at 8:30.
