The Loonie underperforming G10's - Scotiabank

CAD is soft and underperforming all of the G10 currencies as we enter Thursday’s NA session. 

Key Quotes:

"Oil prices are weak as we note broad declines across global, North American and Canadian benchmarks. The outlook for relative central bank policy is delivering added pressure as market participants firm their expectations for Fed tightening in the aftermath of Wednesday’s FOMC minutes."

"Longer-term yield spreads are also widening and the 10Y U.S.-Canada spread is nearing 70bpts at levels last seen in late July. Near-term domestic risk is limited ahead of Friday’s highly anticipated CPI and retail sales data."

"Measures of implied CAD volatility are fading their recent declines and lifting the cost of protection against CAD weakness."

"USD/CAD short-term technicals: neutral-bullish—momentum indicators are modestly bullish and the DMI’s are confirming however trend strength indicators remain remarkably weak."

"USD/CAD is flirting with 1.3050 and threatening a break of the 100 day MA at 1.3065. We highlight the importance of the descending trend line drawn from the June-September highs currently at 1.3131. Near-term support is expected in the area between 1.3020 and 1.3000."