Broad US dollar bid emerges
The Canadian dollar is the top global performer this year but it’s the laggard today. USD/CAD has jumped since the start of North American trading.
Part of that is some softness in crude: WTI is down 61-cents to $65.48. Lumber is also down today but it’s not all bad news in commodities with copper flat and natural gas up 0.8%.
The larger driver appears to be vanilla US dollar buying. Lots of eyes are on the yuan but that’s not where the movement is. The dollar move also isn’t supported by the bond market, where Treasury yields are essentially flat. We’ll try to sort out what’s going on with that USD bid but there has been a speculative push to sell the dollar so it could be some position squaring.
As for the USD/CAD chart, the momentum has slowed and it’s due for some consolidation above 1.20, if not a retracement.