Loonie Ignores Rise in Oil as Presidential Debate Invites Risk Aversion
Published September 26, 2016
USDCAD is holding just under the 1.3200 handle to start the week, essentially unchanged from Friday's closing levels
The Loonie has ignored the 1% rise in oil prices which has likely come on the heels of rumours that a production deal among OPEC producers may still be possible
OPEC producing nations are in Algeria today for a three-day meeting that wraps up on September 28th
Saudi Arabia has offered to reduce production if Iran caps its output this year, although such an agreement remains unlikely considering that Iran is still trying to regain its post-sanction share of the oil market
Will this meeting be a classic example of "buy the rumour sell the fact"?
Larger concerns for USDCAD traders come to the fore this evening with the first of three US presidential debates
Donald Trump's candidacy has uncovered strong protectionist overtones across the electorate and these concerns have crossed into the Democratic platform as well
Both candidates have talked about altering NAFTA and have also come out against the Trans-Pacific Partnership that would be of great benefit to Canada
US 2-year yields are slightly lower on the day and the S&P500 is set to open about 0.5% lower as markets don't seem to be willing to take on new risks ahead of tonight's debate
There is a dearth of Canadian data until Friday's GDP figures so it will be a US dollar and Oil driven story for USDCAD until then
Charts: (1) USDCAD key resistance 1.3239/1.3255 with support 1.3000 and 1.2825/75. (2) Fed Rate Hike Probability. (3) Economic Calendar.