Holiday Volatility: CAD at 1.4375, Bitcoin Dips Below $94K

Today's expected range for the Canadian Dollar against the major currencies:

US Dollar        1.4250-1.4490

Euro                 1.4850-1.5050

Sterling            1.7880-1.8120

WTI Oil (opening level) $68.91

The CAD is opening at 1.4375 ( 0.6956)

The holiday season is now affecting the market.

Profit has been taken and position sizes reduced with a bias toward a stronger USD. Look at the USD index that moved over 100 bps over this week. Or Bitcoin which fell from $102 k to 94 k in 24 hours. Safety is being found in the largest economy in the world. The reserve currency of the world is looked upon as a safe haven as the holidays approach, and people want to have risk off the table. So look for today's levels to be in place until January 6 2025.

Headlines

·    The Japanese yen suffered a massive sell-off in the wake of a very dovish Bank of Japan meeting, trading nearly to 158.00 in the Asian session, and thus more than 2% higher than before the Thursday BoJ, before easing back near 157.00 and below in late Asian session trading today. That saw it clearing the November high of 156.75, with US long treasury yields likely a coincident indicator for prospects of whether USDJPY will mount a charge on the 160+ top.

·    Sterling sold off on the dovish read of the Bank of England, with EURGBP making the recent 0.8220 area lows more emphatic after a revisit of that area ahead of the BoE decision and a rally to 0.8300+ in its wake. GBPUSD challenged below the multi-month 1.2487 low for November in the Asian session overnight – next level the 2024 low of 1.2300.

·    Divergent action in the Scandies, as NOK weakened as the Norges Bank touted a likely rate reduction in March, while SEK firmed sharply on the Riksbank making a hawkish cut as it forecast that it “may” only add one additional cut in the first half of next year, raising its core inflation forecast for next year to 2.0% from 1.6% previously. The Swedish 2-year rate jumped about 10 basis points.