Who Said no Free Lunch?

Who said there is no "Free Lunch in the markets? Today's Bank of Canada announcement in downgrading its GDP outlook for 2013, 2014 and 2015 as well as dropping hints for higher rates, led to broad losses in the loonie, lifting USDCAD near 1.0400 from 1.0320.  The Bank of Canada's downgrade must not have come as a surprise to those who heeded this month's comments from BoC governor Stephen Poloz  and BoC Senior Deputy Tiff Macklem, both of whom had some negative comments regarding Canada's GDP growth and the prospects for weaker inflation. Those comments were made well before the US shutdown /debt ceiling had erupted later in the month, causing red flags for Canadian exports. Today's BoC decision was merely an official materializsation of an already known fact, but not yet reflected in the market. Technicals also called the rally in USDCAD as was alerted 40 mins before today's decision in our Premium service, shedding light on the 13-month trendline support “aiming to retest 1.0360s—the confluence of the 55 and 100-DMAs”.