Everything is going in favor of the Canadian dollar. After the BOC seemed quite calm about inflation and sent the loonie much higher, came the weekly inventory report from the US.
USD/CAD is already trading at 1.2385 after hitting low support at 1.2370. This is quite a significant fall from the highs of 1.2560 seen earlier – a full 200 pips range.
The data shows a rise of 1.3 million barrels, lower than 3.5 million expected. The oversupply of oil has sent inventories higher and higher, exceeding expectations in many case. While the trend hasn’t changed and we have another rise, this one is more moderate.
The price of oil, Canada’s critical export, has already been on the rise, and this provides another boost to the C$.
The Canadian seems to completely ignore the worse than expected manufacturing sales figure released earlier, and it also enjoys weak US data: industrial output fell more than expected.
Here is how it looks on the 30 minute chart:
