European Central Bank President Mario Draghi had a particularly interesting speech in which he mentioned that his institution is ready to act, stating, “We stand ready to adjust our policy stance further.”
Canada’s dollar slid to the lowest in almost four weeks as commodities fell for a fourth day and stocks sank amid bets the Federal Reserve may slow quantitative- easing stimulus in the nation’s biggest trade partner.
In my April column, I argued that 108.00 may be a realistic target for the USD/JPY. Since then, the pair has rallied to break above the 100.00 yen level for the first time since April 2009. So what’s next for this aggressive pair?
There has been a divergence from the historically positive correlation between the price of crude oil and the loonie, with WCS rising while the Canadian dollar fell. With the oil picture shifting in Canada’s favor, a significant short covering could be in the offing.