USDCAD Update

If you are watching the World Juniors, Go Canada Go!!!!

Our boys will redeem themselves tonight after losing to Czechia in their opening game of this tournament!!!!

Lot's to go over on the USDCAD front as I have been away for a few weeks.

First, let's look at how the pair traded since my last update on December 14 when USDCAD was around 1.3545.?I think the term 'directionless' is apt.

The 'directionlessness" for CAD can be seen by the lack of dark colours on the heat map of late:

The CAD is still tied to equities, and inversely to volatility, but the last few weeks CAD has felt a little rudderless.?Moving on.....here is how the G10 currencies fared vs. USD in that same time frame.?I don't typically speak about the Japanese yen as I focus more on USDCAD, but I want to point out that on December 20th, the BoJ surprised the markets by doubling the target range for Japan 10-year Government Bonds?from 0% =/- 0.25% to 0%?+/- 0.5%....as you can see, it was the strongest performer in that time period.?

Next, given the?strong correlation?between CAD and equities, we can look at how the S&P traded in that same period...we can see a move lower on the days following the FOMC from the 4,000 level (roughly) to the mid 1.38's?+/- 100 pts for the remainder of the time.

Here was the graph and comments I made back in November with updated comments in yellow....stay tuned for updated forecasts and analysis next week.

I will wait a week to let the market get back to full participation before performing a deeper analysis, doing any forecasting and making any suggestions to USD buyers and USD sellers....here are some important dates to put into your calendars.

Bank of Canada?meeting dates for 2023?(asterisk denotes release of a Monetary Policy Report):

• January 25*
• March 8
• April 12*
• June 7
• July 12*
• September 6
• October 25*
• December 6

FOMC?meeting dates for 2023 (asterisk denotes release of a dot plot)

• January 31-February 1
• March 21-22*
• May 2-3
• June 13-14*
• July 25-26
• September 19-20*
• October 31-November 1
• December 12-13*

As always, feel free to reach out to me directly to discuss your specific requirements.

Happy New Year, and here's to a great 2023!!!

Janek