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USD/CAD is down 25 pips on the day and testing support from a pair of lows over the past 24 hours.
The main catalyst is a rapidly-improving mood in risk assets. The Nasdaq is up 2.75% and the S&P 500 up 2.3%. Both have bounced around recently but the bulls look like they’re finally making a strong stand ahead of the Nasdaq ‘s lows of the year. That will be tested with Amazon set to report after the close.
CAD is also getting support from the oil market with crude up $1.82 to $107.14 on a report that the EU is set to adopt a gradual ban on Russian oil.
If anything, the bounce in FX is less than stocks and oil might indicate. AUD still remains in negative territory and NZD is down significantly. The US dollar bid has become a beat of its own as dollar bulls pile in as it marks out multi-year highs against the yen, pound and euro. CAD strength against the yen might be more indicative of the broader improvement in the mood.
