Tight correlation develops between loonie and oil
USD/CAD is a bit higher after CPI and manufacturing sales data but there was nothing in the numbers that was particularly notable. CPI fell to 2.0% from 2.4% but that matched the consensus. There may have been some fear of a strong number but it’s not like the BOC was about to hike rates anyway.
More likely is that a small dip in oil prices at the same time along with a pinch of USD strength gave USD/CAD a lift.
The main spot to watch today is oil. Yesterday’s Iran headlines sent USD/CAD to 1.3080 from 1.3025 and now we’ve settled back into the middle of that range after Iran denied the reports. Check out the tight correlation between CAD and oil this week.