USD-CAD Pulls Back from One-Week High

USD-CAD has pulled back from the one-week high of 1.3506 posted earlier in the session, currently trading at 1.3473. The pairing had been supported by the reported widening in Canada’s Q1 current account deficit, and West Texas Intermediate crude prices down near $49.00/bbl, though sellers returned above the figure, and the 50-day moving average at 1.3495. Sterling has managed to gain Tuesday, reducing its average loss to nearly 1% versus the G3 currencies on a week-on-week basis, and compared to an average loss of 1.7% w/w at the close last week. Cable has gotten a lift from a rise in EUR-USD, rising to a peak of 1.2879 earlier. We recommend fading gains into the UK’s general election next Thursday, Action Economics said.

Polls have shown a narrowing in the Conservative Party’s lead, and although the Tories are still likely to win with a bigger majority than at present, it may not be by as wide a margin as had been looking until mid last week. This suggests, so the prevailing wisdom seems to go, that hard-core Tory Brexit MPs may have a stronger influence on the PM than might have been the case, which in turn may raise the odds for a so-called “hard” Brexit.