USD/CAD bears move in and print a fresh low for the week

• USD/CAD slides to fresh lows for the week. 
• Risk-on is supporting the oil price and Loonie. 

The Canadian dollar has strengthened against its US counterpart in Asia in a continuation of the start of the week´s rally. It is printing a fresh high vs. the greenback with USD/CAD down to 1.3641 after notching up its biggest advance in two weeks on Monday. Signs of easing stress in the banking sector contributed to a surge in oil prices and risk appetite that combined are favoring the Loonie.

Turning to the question of near-term BoC policy, April looks like a pretty easy hold for the Bank at this point, analysts at TD Securities argued. ´´Even with a benign outcome, the residual impact on short-end pricing from recent financial market uncertainty is likely to linger well into Q2; more importantly, the Bank can credibly argue that the economy is unfolding in line with the forecast underpinning its conditional pause. We continue to look for the BoC to remain on hold for all of 2023.´´

Meanwhile, Canada's budget is due on Tuesday. It will introduce a system to lock in future carbon credit prices, a move meant to boost investments by giving businesses certainty to develop low-carbon technologies, a senior government source with knowledge of the document told Reuters.

As for positioning, speculators’ net short CAD positions increased notably last week, oil prices and the signaled pause in policy from the BoC are in view.