The Canadian dollar reached a new 5 year low, with USD/CAD reaching 1.1485, the highest since 2009 and only 15 pips from the very round 1.15 level.
With Canadian data coming in slightly below expectations, nothing on the US front and a weakening USD against some major currencies, it seems that the black gold is responsible for the fresh moves.
WTI Crude Oil reached a low of $63.08 and only bounced to $63.34. These are levels that were only temporarily seen on the no cut OPEC decision around the US Thanksgiving holiday. This time it’s not an impulsive move but rather a gradual one lower.
Brent is not that far behind at $66.50, after having fallen below $66. This index is catching up and the Brent-WTI spread is narrowing. Canada Select West is even lower.
In other Canadian data, housing starts rose from 184K to 196K, but this was below 201K expected for November. Building permits continued advancing by 0.7%, but this was below predictions for a rise of 2.1% for October. This is not top tier data. However, also the important data is not that great: Canadian jobs: down 10.7K, unemployment rate 6.6%
And while the loonie was weakening, the greenback actually lost ground to the euro, pound and yen, so this is a C$ related event.
The pair reached 1.1485 and returned to 1.1456 at the time of writing. On the way, it broke above 1.1468 which was the November 5th high. 1.1385 provides further support. Beyond the round 1.15 line, we need to look back to 2009, and real resistance appears only at 1.17.
Here is how it looks on the daily chart:
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