- The US Dollar is rejected at 1.4180 and the CAD picks up with Oil prices bouncing up.
- Chinese authorities have pledged more economic stimulus providing support to the Oil-sensitive CAD.
- Market expectations of a larger BoC cut on Wednesday might weigh on the Canadian Dollar’s recovery.
The US Dollar’s rally has been rejected again at the 1.4180 level and the Canadian Dollar is trimming some losses on Monday. Oil prices are bouncing up on hopes of further stimulus measures in China while the US Dollar treads water.
Comments from the Chinese authorities pledging more fiscal stimulus measures and looser monetary ahead of the key Central Economic Work Conference have given some support to Crude prices. The Oil-sensitive CAD has bounced up with them.
On the Other hand, the US Dollar is looking for direction as the impact of the stronger-than-expected US employment figures waned. Markets are pricing a nearly 90% chance that the Fed will cut rates by 25 basis points next week, which is keeping US Dollar rallies limited.
In Canada, the BoC meets this week and is expected to deliver a large rate cut on Wednesday. Downbeat Canadian Employment and business activity figures sustain that view. This is likely to weigh on a deeper CAD recovery
