Wednesday, 13 June 2012
Pressure on Oil Makes Traction Slick for CAD
Scotiabank says comments from Saudi Arabia's oil minister suggest an expectation for loose supply-demand dynamics to continue as a result of diminished demand. "This suggests continued pressure on oil prices that may pose a near term challenge" to any Canadian dollar rally, firm says. The 30-day rolling correlation between CAD and WTI remains near its 12-month high at 0.93, Scotia says. "However, fundamentals are suggestive of longer-term CAD strength, given strong debt and fiscal metrics, and the most hawkish (on a relative basis) central bank among the majors," Scotia adds.