FX Action: USD-CAD has flopped back to the mid 1.2700s
FX Action: USD-CAD has flopped back to the mid 1.2700s after flipping to a peak of 1.2924 earlier in the week. The recent ramp up in U.S. yields has been a support on the one hand, while the concurrent ramp up in oil prices have been a downward driver on the other hand, which have accounted for the choppy price action while leaving USD-CAD showing little net direction over the last week. Analysts expect more of the same. Support comes in at 1.2729-30. The next data out of Canada of note will be April CPI numbers, which are due tomorrow. Analysts expect headline CPI at 2.3% y/y, which would match the March rate. The BoC has indicated comfort with the elevated inflation rates, which has been above the 2.0% target mid-point since February, which policymakers have put down to temporary factors. March retail sales data is also due Friday, where analysts expect a rise of 0.2% m/m. In-line outcomes shouldn't have a material impact on the Canadian dollar.