The Canadian dollar (Currency:CAD) is looking solid today - this despite the broad-based sell-off in equity and commodities. Such a scenario would have, until 2013, seen CAD weaker suggesting to us that the CAD's relationship with the risk-on / risk-off trade has broken down: The pound / Canadian dollar exchange rate is 0.2 pct in the red; GBP/CAD is at 15541 at 13:20 in London. The US dollar / Canadian dollar exchange rate is unchanged on last night's closing level at 1.0016. The euro / Canadian dollar exchange rate is 0.94 pct in the red at 1.3352. Please be aware that the above quotes are taken from the spot market - your bank's quote will have a spread added to the rate as this is where they derive their profit on currency sales. An independent currency provider will however guarantee to undercut your bank's offer; thus delivering you more FX. Find out more here. Canadian dollar - risk doesn't seem to matter now "There is a clear “risk off� bias to the broader market undertone today following weak data reports overseas. But the impact on the CAD is liable to be limited, with CAD/risk correlations dropping right off over the past few weeks (CAD/ S&P 500 correlation on a rolling 22-day basis is more or less zero at the moment from +79% a month or so ago)," says Shaun Osborne at TD Securities. According to Osborne short-term rate spreads remain an important driver of the CAD versus the USD, as we have highlighted in the recent past — especially as the risk correlation faded. "Short-term spreads have narrowed notably, undercutting the CAD, since the BoC’s more dovish rate message last month. Longer-term spreads are moving against the CAD as well, however. 10-year US bond yields at 2.02% today are marginally above Canadian 10s for the first time since March 2012—another drag on the CAD," says Osborne. And the relationship with oil prices has also broken down In addition to the deterioration in the risk-on/off relationship CAD once enjoyed we note that the relationship with oil price is also deteriorating. "CAD is flat against the USD and outperforming the European currencies. Concerns over the impact of fracking on its ability to raise production and depress longer term oil prices have so far been ignored by WTI and CAD; however as we noted yesterday the correlation with CAD and oil is no longer particularly strong," says Camilla Sutton at Scotiabank. However, while WTI oil may note be as important to the Canadian currency as it once was we note that there is another oil subspecies that does matter. Sutton says: "The spread between Brent and Western Canadian Select oil prices is more important for the Canadian economy and CAD, and this continues to trend lower, having peaked in December at $65 and now trading at $44. Today there is limited economic data, leaving CAD to trade off of the broader trends." So for today, according to Sutton, the Canadian dollar is forecast to trade in a relatively narrow range of 0.9991 (the 200�day moving average) to 1.0044 (recent congestion).

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