Analysts at DB see higher USD/CAD
The Canadian dollar will be swayed by the whims of OPEC at the December 6 meeting but even beyond that, winds of trouble are blowing.
"We continue to favor USDCAD higher as a nearly fully priced Jan BoC meeting (19 bps) suggests the pair could be more sensitive to a weakening of data than strengthening in the next two months," DeutscheBank analysts write today.
They note that soft labour force participation could restrain wage gains and that the slump in Canadian housing is not over.
"Knock-on effects for consumer spending, residential investment and construction activity will hover in the background as a possible downside risk for some time to come," they write.
As for oil, they say that a recommitment to OPEC targets wouldn't be enough to bring oil supply and demand back into balance. They see a need to take 1.5 million barrels per day out of OPEC October output.