FX Action: USD-CAD clawed out a new one-month peak
FX Action: USD-CAD clawed out a new one-month peak, this time at 1.2752. A sharp drop in oil prices has given the pair fresh buoyancy after U.S. initial claims and PPI data disappointed yesterday. Analysts anticipate that the gains will prove to be a temporary phase, and for the big-picture bear-trend to reassert before long, basing this view on expected steady-to-firmer oil prices and more BoC tightening. There is nothing Canadian schedule today. Regarding BoC policy, our projection remains for a follow-up 25 basis point rate hike in October, which would take rates to 1.00%. Analysts see two more 25 basis point rate increases next year, anticipating the central bank to take a measured approach to policy normalization.