16 Jan 2014
Flash: - BMO Capital Markets
FXstreet.com (Guatemala) - Stephen Gallo, European Head of Currency Strategy at BMO Capital noted events around the CAD.
Key Quotes:
"For USDCAD, we appear to be in a steady grind higher towards 1.100, which is basically in-line with our expectations, pre-BoC. We expect to see decent offers in front of 1.100 the figure, in view of barrier defence there and in view of 1.500 barrier defence in EURCAD. In terms of what happens once 1.100 in USDCAD is hit, we’re a bit 50/50."
"We had been expecting overstretched valuations and the desire to book profits to restrain additional CAD weakness above 1.100. However, the nature of this move lower in the CAD is defined in part by how much the CAD has decoupled from key fundamentals, such as energy prices. If anything, we’re inclined to adjust upwards our expected pre-BoC ranges in USDCAD to 1.0920-1.111 from 1.090-1.1020."
"For today, participants should eye US yields (290bps in sight), Canadian existing home sales at 0900 EST and Fed speak for directional bias in USDCAD. The ‘pain trade’ in USDCAD is lower, but the CAD bears seem to dominate price action at the moment."
Key Quotes:
"For USDCAD, we appear to be in a steady grind higher towards 1.100, which is basically in-line with our expectations, pre-BoC. We expect to see decent offers in front of 1.100 the figure, in view of barrier defence there and in view of 1.500 barrier defence in EURCAD. In terms of what happens once 1.100 in USDCAD is hit, we’re a bit 50/50."
"We had been expecting overstretched valuations and the desire to book profits to restrain additional CAD weakness above 1.100. However, the nature of this move lower in the CAD is defined in part by how much the CAD has decoupled from key fundamentals, such as energy prices. If anything, we’re inclined to adjust upwards our expected pre-BoC ranges in USDCAD to 1.0920-1.111 from 1.090-1.1020."
"For today, participants should eye US yields (290bps in sight), Canadian existing home sales at 0900 EST and Fed speak for directional bias in USDCAD. The ‘pain trade’ in USDCAD is lower, but the CAD bears seem to dominate price action at the moment."