Most USD pairs have reversed their losses but USDCAD is still sinking
I’m buying into this drop in USDCAD. Two reasons. USD is bouncing back after the market sees that the NFP report isn’t that bad, if you take boith Sep & Oct together and chuck in hurricane or three. The CAD jobs data is jumpy as a box of frogs and in no way changes what the the rest of the data has been telling us, that the BOC is facing some worsening economic numbers all round.
Once again CAD has been very volatile as it gets a double whammy of bad US jobs data and good Canadian jobs data. That’s a move I’m happy to buy into and I’ll build some small longs the lower it goes. This report doesn’t wipe out everything else we’ve seen recently from Canada and it doesn’t mean the BOC is going to hike at its next meeting. The next bad number and CAD will sell off again. Plus, we have a Fed hike to throw into the mix, and we know how the dollar likes to go bid into an FOMC.
I’m in at 1.2748 and will look to pick a bit more up down near 1.2700. I’ll be happy to take this down to 1.2600, with an initial stop under 1.2570.
- Heads up for some early end of month FX clues on the MSCI rebalancing - November 11, 2021
- Everyone’s waiting for 112.50 in USDJPY - November 9, 2021
- Celebrate the taper by taking part in our NFP competition - November 3, 2021