The Loonie is currently trading on the high of the day slightly to the north of the 1.2450 per barrel mark, sharply up from Asia Pacific session lows around the 1.2400 level, the pair trading as a function of oil prices more than anything else.
Crude oil prices have reversed suddenly from what were at the time very impressive on the day gains (WTI was up more than $3.0 above $83.00) to hit fresh near four-week lows with this latest bout of selling pressure exerting a drag on the loonie and giving USDCAD troubles.
Crude oil news cycle is likely to relax on Friday (although traders should be on notice for any announcement from the US) and economics will return to the forefront with the release of US and Canadian October labor market reports.
With both the Fed and BoC currently on course to start raising interest rates in 2022, the timing of lift-off is highly sensitive to the persistence of inflation at high levels, but also the progress back to pre-pandemic levels of health of the labor market. Loonie traders will have to weigh up both jobs’ reports simultaneously, which can sometimes make for a confused reaction in USDCAD.
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