Yesterday’s upbeat commentary from the BOC, similar sentiments from the government overnight and the end of the short-term unwind of reflation trades which spooked the market late yesterday is helping push USD/CAD down toward the lows for 2009 posted in early June. Traders reported a large bid from a Canadian bank at 1.0820 has been filled on the grind lower. 1.0775/80. Expect stops below 1.0770.
We’d be reluctant to jump on the CAD band wagon down here, especially with reports that China is playing both sides of virtually every currency these days.