USD/CAD: rallies onto 1.37 handle again as sentiment for commodity bloc weakness post RBNZ

Currently, USD/CAD is trading at 1.3711, up 0.41% on the day, having posted a daily high at 1.3728 and low at 1.3651.

RBNZ: the bottom line, RBNZ is clear - ANZ

USD/CAD is making further tracks to the upside in an unfriendly environment for the commodity currencies what with the divergence between Central Banks (as seen today in the rBNZ) and metal prices. WTI was bid overnight and that supported the CAD, but was short lived and we have seen a pop to the 1.37 handle with a fresh high in early Asia. There could be stark reminders from the RBNZ in respect to Canada's housing problems and subsequent bearishness around the loonie. 

"We remain CAD bears on the basis of relative central bank policy, however, we acknowledge the short-term period of consolidation that appears to have emerged following last Friday’s impressive 1% rally from a fresh 14-month low. A reminder that we hold a Q2 USDCAD forecast of 1.40," explained analysts at Scotiabank. 

USD/CAD levels

USD/CAD remains stuck within Friday’s range still between the mid-1.36 area and the upper 1.37s. Analysts at Scotiabank explained that the 9 day MA remains an important level of near-term congestion, providing support on a closing basis. "We look to support at 1.3650 and continue to highlight resistance between 1.3720 and 1.3750." A break through 1.3750 today opens up the 5th May highs at 1.3792.