Is it the $USD or $CAD that $WTIC is best correlated to? July2014 was a pivotal point for all.... But from that point on ITZ has to side with the Canadian Dollar...although recently it has uncoupled. The Canadian dollar climbed against its U.S. counterpart on Friday, touching 14-month highs as strength in domestic retail sales offset lower oil prices, while data showed that investors have turned bullish on the currency. Canada's annual inflation rate slowed to a 20-month low of 1.0 percent in June, although core measures showed signs of strength.
The Bank of Canada last week raised its key rate to 0.75 percent, the first increase since September 2010. Chances of a second hike in October climbed above 70 percent from a roughly two-thirds chance before the economic reports, data from the overnight index swaps market showed. Still, Canada's bond market is signaling the Bank of Canada will not reach its 2 percent inflation target anytime soon. That suggests the central bank is unlikely to pull off more than one more rate hike even as money markets see further tightening into 2018. The Canadian dollar is recent run up is hitting some resistance. The past week has been more about U.S. dollar weakness than Canadian dollar strength. Let's see if the US Dollar will pivot at the 92 level - or - if the Canadian Dollar can breakout above 80. WTI Crude will most likely trend sideways here until the currencies change.
