TD Securities analysts believe the “risk off” undertone today is a resumption from yesterday's after Google's much weaker than expected earnings. “The CAD was one of the main casualties of yesterday’s late moves and it remains a notable under performer against a generally mixed USD today”, wrote analysts Shaun Osbourne and Greg Moore, allowing more CAD weakness on risk aversion.
Today's focus goes to the Canadian CPI: “Higher headline inflation is expected but core and, especially, seasonally adjusted measures are expected to show more moderate price gains”, thy added, pointing to more CAD weakness on weaker than expected data.
The pair has already got back to the high 0.98 area and trades around the 40-day MA and trend channel resistance again. “A firm close on the week—in the upper 0.98s at least would be technically constructive”, state TD Securities analysts, pointing to a break above 0.9885 to allow gains towards 0.9950.