Year to date, the Canadian Dollar is one of the strongest currencies amongst G-10 countries and the trend is likely to continue as the FED turns dovish and ready to cut interest rates. The Canadian Dollars strength can be attributed to a weaker USD, rising Crude Oil prices and the aggressive narrowing of the spread between US/Canada interest rate differentials.
1. USDCAD and Crude Oil back in sync, continues to register lower lows.
2. The historical inverse correlation between USDCAD and Crude Oil was on ‘hold’ as US/Canada interest rate differentials widened considerably
