USDCAD: Trading within a broad range – TDS

By FXStreet FXStreet (Delhi) – Research Team at TD Securities, note that a very odd session in terms of price action for USDCAD yesterday, which made a run up to 1.3160/70 in the morning, only to come crashing down to test 1.3040 by the end of day.

Key Quotes

“In the absence of news flow or data yesterday, the swing (at least to the topside) is seemingly attributed to a rally in crude oil. But, in stepping back, we do not see yesterday’s moves as consequential but rather just noise in what we believe should be a rather benign period of trading for USDCAD over the next couple of months. There are risks to that outlook however, and entirely related to a prospective Fed hike.”

“As noted above, there is plenty on the calendar today between the data and Fed speakers. For the data, trade balance remains an important indicator but as we noted yesterday, the Bank of Canada’s rhetoric from the last meeting suggests that the risk of change in policy is not an imminent risk.”

“Nonetheless, the evolution of non-commodity exports remains a focal point in the Bank’s rebalancing story which will take years and require a persistently weak CAD to facilitate this adjustment. …read more

Source:: FX Street