In retrospect, the Canadian Dollar has performed much better than expected this week in the face of patently discouraging developments. In fact, the Canadian has held up despite impressive range up action in the Dollar, disappointing Chinese growth revisions and in the face of quasi-deflationary commodity price action. Perhaps the Canadian has found a fundamental value zone on its charts, especially after BOC comments that their January rate cut “did its job”. Once the smoke clears from the range up action in the Dollar, in the wake of Friday’s US data, we would expect the Canadian to forge its highest exchange rate since January 21st.
