The Canadian greenback jumps to the very best ranges of the month

Maybe the market was more anxious about an election in Canada than we thought?

It’s tough to pin down why the loonie is such a standout performer today. It’s easily the strongest G10 performer today up 0.6%, doubling the Australian dollar’s gain.

It’s not a huge move but it drops the US dollar to the lowest level against the loonie since October 30. That’s the day after the Federal Reserve and Bank of Canada both cut rates. Where they differed is that the BOC shifted strongly to the sidelines, a move underscored by yesterday’s CPI.

As for news flow today, it’s not great for the loonie. Risk assets are down and the US dollar is higher against the euro and yen. Fed Governor Waller was very dovish late yesterday and he’s a good bet to be Fed chair so that may be weighing on the dollar. For Canada, today’s housing starts numbers were poor.

A tailwind for the loonie is the gain in gold (+0.6%) and oil (+1.1%) but those are relatively small moves. On net, this looks like a flow driven move but it could also be a sign of improving risk appetite.

The chart looks comfortably in the late-Oct/early-Nov range but still with a bias higher.