CAD review

The Canadian Dollar strengthened against most currencies on the back of the rally in crude oil prices. Crude Oil prices at the highest level in 2015 should support Canadian Oil Sands output, which has very high capital costs but marginal costs are relatively lower and this surge higher in prices should support a pick-up in output in the short term. 

The Canadian Dollar was also impacted by a Bloomberg report which implied that Bank of Canada could move the inflation target higher from 2 percent. This would mean that Bank of Canada could get more space to manage interest rates as the weak Canadian Dollar pushes inflation higher and with low growth there is no space to increase rates.