Canada Building Permits for the month of October were a positive surprise for the markets (actual 18.0% vs. forecast 1.1%). The recovery in the Canadian economy is well under way and were it not for the super-strong U.S. data on Friday, USDCAD could have made another push towards parity. Indeed the U.S. data overshadowed the improving Canadian employment situation which also surprised positively on Friday. The closing of many short-USD positions pushed USDCAD up from 1.0450 to almost 1.0650, and the sliding price of crude oil has not helped the loonie. Today markets are waiting to see how Fed Chairman Ben Bernanke reacts to Friday's data, and analysts are especially keen to see if the monetary tightening that has been priced in has been justified. Should the market fail to find direction from Bernanke's words, we may well see the drop in USDCAD resume.
USDCAD Support/Resistance: 1.0458/1.0581