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CAD driven by the greenback - TD Securities

FXStreet (Barcelona) - Shaun Osbourne, Chief FX Strategist at TD notes the conditions surrounding the Canadian dollar, but for today, said the return to trading following the Thanksgiving weekend will see no domestic data in Canada today.

Key Quotes:

“We will have to wait until Thursday with the release of August Manufacturing Shipments (we are above consensus with a 1.5% m/m decline whereas the market sees it at –2.0%) and September's CPI on Friday, where we are also slightly below consensus, calling for core to decelerate to 2.0% y/y from 2.1% in August."

"Beyond those considerations, the CAD will do the “usual thing” of late and take its cue from the USD—and other markets. Oil prices have stopped falling but, below $85/bbl., WTI remains close to its lowest since 2012; concerns about slow global growth and ample supply will keep the outlook for commodities more defensive, the more so as the Fed’s QE programme winds up at the end of the month and the liquidity spill-over that has benefitted some (e.g.., gold) markets will dry up."

"The CAD is not correlating well with commodities at the moment”

"But weaker commodities will weigh on CAD sentiment and help keep the CAD soft”.

“Persistent weakness will work negatively into the CAD via Canada’s terms of trade."

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