19 Dec 2014
With CPI and retail sales awaited, oil to be the core focus for CAD – Scotiabank
FXStreet (Barcelona) - Camilla Sutton CFA, CMT, Chief FX Strategist at Scotiabank, explains that with the CPI and retail sales ahead today, the core driver for CAD is most likely to be the interpretation of the economic and monetary policy impact of falling oil prices.
Key Quotes
“CAD is soft into the open. Today’s highlight will come from the release of inflation and retail sales. CPI is expected to fall to 2.2%y/y with core expected to rise to 2.4%y/y; while October retail sales are expected to drop.”
“However the core driver for CAD is likely to be the interpretation of the economic and monetary policy impact of falling oil prices. For the economy they are likely to prove a net negative, with the pick up in the U.S. economy and lower CAD, seen only as mitigating as oppose to offsetting impacts. In addition the drop in oil is likely to provide room for the BoC to be patient.”
“We expect CAD to trend lower in the near‐term and to close 2015 at weaker levels to where it is currently trading, but only modestly so.“
“USDCAD short‐term technicals: bullish—upward momentum has slowed, but technicals continue to warn of USDCAD upside risk.“
“We will watch oil prices closely, but technically we are biased to be long USDCAD.”
“Support comes in at 1.1521 (the open from December 12). The recent high of 1.1674 stands as firm resistance and a break above open up a test to 1.1700 followed by 1.1800.”
Key Quotes
“CAD is soft into the open. Today’s highlight will come from the release of inflation and retail sales. CPI is expected to fall to 2.2%y/y with core expected to rise to 2.4%y/y; while October retail sales are expected to drop.”
“However the core driver for CAD is likely to be the interpretation of the economic and monetary policy impact of falling oil prices. For the economy they are likely to prove a net negative, with the pick up in the U.S. economy and lower CAD, seen only as mitigating as oppose to offsetting impacts. In addition the drop in oil is likely to provide room for the BoC to be patient.”
“We expect CAD to trend lower in the near‐term and to close 2015 at weaker levels to where it is currently trading, but only modestly so.“
“USDCAD short‐term technicals: bullish—upward momentum has slowed, but technicals continue to warn of USDCAD upside risk.“
“We will watch oil prices closely, but technically we are biased to be long USDCAD.”
“Support comes in at 1.1521 (the open from December 12). The recent high of 1.1674 stands as firm resistance and a break above open up a test to 1.1700 followed by 1.1800.”