Oil still riding high
USD/CAD is nearing 1.2400 after a 54-pip gain today that's part of a broader selloff in the commodity currencies.
There's nothing in the broader market that would suggest two days of decent declines in the loonie. Equities were strong yesterday and today. Treasury yields have generally been lower, and are flat today.
Overall, I don't see much of a case for further USD/CAD gains here. There are some major risks this week with non-farm payrolls coming on Friday something to watch but we'll cross that bridge when the data is released. On the Canadian side, April GDP tomorrow will be weak and brushed off because of lockdowns and Thursday is a Canadian holiday.
I tend to think the weakness this week is exaggerated by month/quarter-end flows. In the bigger picture, there has been a turn after a year of selling but so long as 1.27 holds, the trend lower is clear.