"Market relief after the Spanish banking sector agreement is fading" - Camilla Sutton at Scotiabank.

The Canadian dollar (Currency:CAD) is entering the North American open relatively flat, this following an earlier rally that came in the wake of news concerning Spain and Chinese economic data.

Looking at the spot rates we see the pound Canadian dollar exchange rate is 0.35 pct up at 1.5946. (We have published the latest set of FX forecasts on our IMT publication, access is Free via this Facebook entry page).

The US dollar to Canadian dollar exchange rate is 0.1 pct lower at 1.0256.

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"The CAD ground steadily higher through late trade Friday, with savvy buyers looking for pro-risk news over the weekend, and moved up smartly again in Asian trade," notes Shaun Osborne at TD Securities.

That said, the market is slowly working to close the big gap left open by the USD sell-off in early Asian dealing.

As risk sentiment fades, "we should perhaps look for a little more lift in funds as investors chase the headlines and follow other asset market trends in the absence of any Canadian or US data," says Osborne.

"After initially rallying, CAD is entering the North American session flat to Friday’s close. Market relief after the Spanish banking sector agreement is fading," says Camilla Sutton at Scotiabank.

As mentioned there is no economic data today and limited data this week, however Governor Carney will deliver introductory remarks for ECB Noyer, at the International Economic Forum of the Americas in Montreal ‐ this is unlikely to move CAD sustainably in the opinion of Scotiabank.

More important for CAD is the weekend’s release of Chinese data (see USDCNY section), which points to some stabilisation in the economy.

This is encouraging to growth sensitive currencies like the Canadian dollar and Australian dollar.