The loonie’s rally Monday showed it’s breaking free from commodity prices, which tumbled. The currency surged after Bank of Canada Senior Deputy Governor Carolyn Wilkins signaled in a speech that economic growth is broadening and that the central bank, when it comes to stimulus, may need
to let up on the gas. "The hawkish nature of the speech is the first acknowledgment from the bank that the next move is likely to be a hike," CIBC’s Avery Shenfeld wrote.
As the CAD goes up supported by the last comments from the BoC and the latest data from the economy, the prices of the commodities are lower. One of which is the price of Oil, that continue to trade around $46.32 per barrel and below the recent resistance below $46.80-$47.00.
In order for the correlation to hold, the prices of commodities must increase and continue to move in the same direction as the Canadian currency.
Source: Bloomberg Pro Terminal
Trader - Senan Fuchedzhiev
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