9 May 2014
CAD positioning move losing steam - RBS
FXStreet (Guatemala) - RBS analysts noted that the Canada employment slipped 28.9K in April after a strong start to 2013.
Key Quotes:
“The drop was mainly centred in full time jobs, which fell 30.9K. Full time jobs had averaged +27.4K per month in the first three months of 2014 after full time job gains were net flat in 2013 – as growth momentum more broadly does not appear to be taking off, the solid start to employment in 2014 did not appear sustainable and there was indeed a pullback in full-time employment in April”.
“This may take some of the steam out of the more positive Canada economic story. Still, with the weak USD environment it may not take the steam out of the USD/CAD move quite yet, which we see as fuelled by positioning”.
“We are cautious chasing CAD gains at current levels and would use any further positioning clearout toward 1.08 in USD/CAD as an opportunity to sell CAD, particularly on the crosses”.
Key Quotes:
“The drop was mainly centred in full time jobs, which fell 30.9K. Full time jobs had averaged +27.4K per month in the first three months of 2014 after full time job gains were net flat in 2013 – as growth momentum more broadly does not appear to be taking off, the solid start to employment in 2014 did not appear sustainable and there was indeed a pullback in full-time employment in April”.
“This may take some of the steam out of the more positive Canada economic story. Still, with the weak USD environment it may not take the steam out of the USD/CAD move quite yet, which we see as fuelled by positioning”.
“We are cautious chasing CAD gains at current levels and would use any further positioning clearout toward 1.08 in USD/CAD as an opportunity to sell CAD, particularly on the crosses”.