Of all the comm dollars, none has held up as well against the buck as the loonie. While all others have tumbled against the greenback, the Canadian dollar held firm rejecting 1.2500 level on multiple occasions.
A big reason for loonie’s relative strength is the fact that the BOC is the only other G-7 central bank considering a rate hike. Tomorrow’s Canadian CPI and Retail Sales data should go a long way towards determining if another rate hike out of Canada is a real possibility before the year-end.
The market is looking for stronger data out of both CPI and Retail Sales data and if the numbers beat expectations USD/CAD could test the 1.2400 level. However, if the data misses the pair could quickly push towards 1.2600 which has served as resistance for the past two weeks.
