- Underperformance for EURCAD on Tuesday made sense in the wake of the firmer-than-expected inflation data in Canada, and the moderate boost to higher beta currencies alongside the bounce in equities.
- We noted that BoC-dated OIS has shifted from 36bp to 33bp of cuts priced for the Dec 11 decision and highlighted how a hawkish repricing may provide further impetus for EURCAD to have a deeper correction lower, having previously broken trendline support drawn from the August 2022 lows.
- Additionally, with headlines surrounding Russia and Ukraine thrusting European geopolitical uncertainty back into the spotlight, EURCAD (-0.46%) has extended weakness today and might remain vulnerable to a more protracted move lower for the single currency.
- The cross is now approaching the post-election lows at 1.4712 and further downside momentum would turn the focus to the June lows around the 1.4600 mark. Eurozone flash PMIs and retail sales data in Canada are both scheduled on Friday.
FOREX: EURCAD Extending Weakness, Approaches Post-Election Lows
Last updated at:Nov-20 16:56By: Jack Lewis
Cross Currency Pairs+ 1
- Underperformance for EURCAD on Tuesday made sense in the wake of the firmer-than-expected inflation data in Canada, and the moderate boost to higher beta currencies alongside the bounce in equities.
- We noted that BoC-dated OIS has shifted from 36bp to 33bp of cuts priced for the Dec 11 decision and highlighted how a hawkish repricing may provide further impetus for EURCAD to have a deeper correction lower, having previously broken trendline support drawn from the August 2022 lows.
- Additionally, with headlines surrounding Russia and Ukraine thrusting European geopolitical uncertainty back into the spotlight, EURCAD (-0.46%) has extended weakness today and might remain vulnerable to a more protracted move lower for the single currency.
- The cross is now approaching the post-election lows at 1.4712 and further downside momentum would turn the focus to the June lows around the 1.4600 mark. Eurozone flash PMIs and retail sales data in Canada are both scheduled on Friday.
