USD/CAD: consolidates mid 1.27's, awaiting tax vote outcome and Friday CPI
- USD/CAD risks are with Candian CPI Friday and House tax vote coming up.
- USD/CAD: consolidating in the mid 1.27s just below the midpoint of its range from late October.
Currently, USD/CAD is trading at 1.2735, down -0.21% on the day, having posted a daily high at 1.2786 and low at 1.2727.USD/CAD has been tailing off as WTI stablises.
Crude oil prices holding at the lower end of their weekly ranges
While we await the outcome of the voting in the House over US tax reform, scheduled to start between 1755/1810 GMT, markets also get set for Friday’s highly-anticipated Canadian CPI figures. "Domestic rate expectations are stable following BoC SDG Wilkins’ most recent speech on policy uncertainty, with OIS pricing 11bpts of tightening for January," explained analysts at Scotiabank. The analysts also note that risk reversals are hinting to a moderation in the premium for protection against CAD weakness: "The near-term balance of risk appears to favor CAD consolidation."
"USDCAD is consolidating in the mid- 1.27s just below the midpoint of its range from late October. Momentum signals are neutral and trend strength signals are muted. The 21 day MA (1.2744) appears to be providing support, and resistance is expected between 1.2780 and 1.2820," explained analysts at Scotiabank.