We look for USDCAD to remain firm and comfortably above 1.090 into the start of Wednesday, with the BoC and key Canadian data releases beginning from mid-week. For the week as a whole, we are expecting a 1.085-1.105 range to hold, with the main risk to that range stemming from the fact that the CAD could initially sell off more than we expect at Wednesday’s BoC. We expect stretched valuations in the CAD to offer opportunities for profit taking in CAD shorts this week, but we expect those opportunities to be in place largely at lower levels in the CAD, relative to current spot prices.
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BMO