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USD Up, CAD Down in Uneventful Trading; RBA Meeting

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Rates as of 0500 GMT

Market Recap

Sometimes thin markets make for volatile trading as a few large orders hit a market without many participants to absorb the flow. Other times they just mean little movement as no one is around to trade. Friday was the latter, suggesting that maybe today will be too.

A blowout US nonfarm payrolls on Friday 916k vs market estimate of 660k had relatively little impact on the FX market. The dollar gained but not that much as most currencies stayed within a narrow range. As the graph at the bottom shows, most currencies were in a range of 0.2, which is barely worth writing about. The US stock market was closed Friday, but the SP 500 is indicated up 0.3 this morning, which is nice but nothing to get excited about.

The exception was CAD, which dropped sharply. Lower oil prices plus a tighter lockdown are weighing on the currency. While OPEC believes the oil market can absorb increased supply, the market is starting to say not at the same price. Meanwhile, Canada is taking measures to counter the rising virus count. Ontario entered a fourweek lockdown on Saturday. While the absolute level of virus cases in Canada isnt that high relative to some other countries, the direction is worrisome while other countries have gotten or are getting their caseloads under control, Canada is edging higher.

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