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Busy Week Ahead for USDCAD Traders

Published October 31, 2016
  • USDCAD is trading just shy of the 1.3400 handle, flat to Friday's closing levels but lower than the fresh 7-month high in the mid 1.3400's reached during Monday's Asian session
  • Driving the price action to begin the week are headlines that non-OPEC producers such as Russia, Kazakhstan, Mexico and Oman have made no commitment over the weekend to join OPEC in limiting production to prop up prices
  • This is another set back for a potential deal also facing headwinds from OPEC members Iran, Iraq, Nigeria and Libya who are asking for exemptions
  • OPEC ministers meet again Nov. 30 in Vienna at which time a firm answer should be reached
  • Oil is lower on the news, with WTI trading at $48.23 a barrel for cumulative losses of 6.9% in nine sessions since October's peak of $51.93
  • The week ahead is packed with top tier data from the US and Canada, highlighted by Wednesday's Fed meeting and Friday's dual US and Canadian employment reports
  • Canada also reports GDP on Tuesday and trade figures on Friday
  • The US reports ISM manufacturing and services PMI's Tuesday and Thursday, respectively (see full schedule, Chart 3)
  • The fallout from the FBI's second investigation into the Clinton email scandal has turned the election on its head with just 8 days to go
  • Odds of a Trump victory have improved substantially with Sunday's poll from ABC/Washington Post showing Clinton ahead 46% to 45% – now neck and neck despite Clinton leading by over 10 points a week ago
  • Any momentum for Trump is likely negative for the Loonie and is sure to keep volatility high right up to election night
  • Bias remains higher with a close above 1.34, targeting 1.3575 

Charts: (1) USDCAD and US-CA 2-year spread both move higher. (2) Fed rate hike odds. (3) Economic Calendar.