CAD: The 7.5% drop in crude oil prices, did the Canadian dollar no favor - BBH

Research Team at BBH, notes that the US dollar rose against the Canadian dollar though it fell against the other dollar-bloc currencies in the last week.  

Key Quotes

“The 7.5% drop in crude oil prices, the largest fall in five months, did the Canadian dollar no favor.  Canadian employment data was disappointing, and the economic momentum appears to be fading.  The Bank of Canada will likely recognize that job creation nearly stalled in Q2.  The trade country's trade deficit rose to record levels in April-May.  The US dollar is nearing a band of resistance that runs from CAD1.3085 to CAD1.3145.  We expect this area to be overcome, and for the US dollar to rise into the CAD1.33-CAD1.35 area in the period ahead.  

Whereas the Canadian dollar lost about 1.0%, the Australian dollar gained around 0.8%.  The Australian dollar has been resilient to the political uncertainty and the negative actions by the rating agencies.  It has nearly retraced all of the losses sparked by the Brexit decision.  Before the weekend, the Aussie was testing a cap near $0.7570, but assuming this can be overcome, there is technical scope to enter a $0.7650-$0.7700 range. In the week ahead, Australia's employment report may give the market pause, but the next key report, in light of the recent RBA statement, is Q2 CPI on July 26. A soft report, coupled with a firm currency, could spark speculation that the central bank may use the scope to ease monetary policy.”