The late rally within the Canadian greenback vaulted it simply forward of the US greenback as the highest performing G10 forex final yr. The yen was on the backside of the pack.
The principle thrust of the rally within the pair was the restoration from covid and the related rally in commodities, together with the inflationary impulse because of prior lockdowns and excessive items demand.
It was a pleasant transfer in CAD/JPY early final yr that originally topped in June, then discovered its legs for a brand new excessive in October earlier than falling again on omicron. With the market more and more shifting on from omicron, may there be extra to come back? In spite of everything, the restoration from covid continues and we’re early in a fee hike cycle.
My major fear is China getting hit by omicron closures however there’s an argument that will even be inflationary as provide chains are once-again disrupted.
Technically, the latest retracement units up the potential for brand spanking new highs, with little standing in the best way if 93.00 is damaged.
The pair is up 1% at this time, or 91 pips, to the very best since November 10.