USD/CAD back to 1.2588 from 1.2646 earlier.
The North American economic calendar is quiet to start the week so the focus will remain on disappointing Chinese trade numbers. The huge miss in imports and exports was brushed aside by officials who blamed the Lunar New Year but the market is skeptical.
Commodity currencies have been sliding since the data with AUD falling a full cent but the loonie is also substantially lower. The damage began to reverse on some broad US dollar weakness on the Hamada comments and a climb in WTI crude, which is up $1.32 to $52.47.
USDCAD intraday
There are some bids at 1.2550 and $375m running off at the options cut at 1.2500 (full options expiries today).
Looking ahead the Bank of Canada decision is on Wednesday. Expectations for a rate cut are nil but the BOC also releases its quarterly Monetary Policy Report. It sets out growth expectations, including a first quarter that Poloz called 'atrocious'.
The Globe and Mail breaks down what's expected and how it could lead to a rate cut:
Avery Shenfeld, chief economist at Canadian Imperial Bank of Commerce, said in a report Friday that the question of another rate cut this year could largely be answered by how quickly the Bank of Canada believes the economy will get its anticipated bounce-back from the oil shock effects of the first quarter. Counterintuitively, he suggested that a more optimistic outlook from the bank might actually make another cut more likely.
If it expects the rebound to come in the second quarter, he wrote, "it will set a higher bar for the economy to meet, and make it easier for the Bank [of Canada] to be disappointed as the numbers roll in and deliver another rate cut."
