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9 Feb 2015
USD/CAD gains to pick up above 1.2540/50 – TDS
FXStreet (Barcelona) - Shaun Osborne, Chief FX Strategist at TD Securities, views any USD/CAD weakness to find supported in mid/upper 1.23 levels, expecting the pair to pick up gains above 1.2540/50.
Key Quotes
“Markets have adjusted very slightly expectations for lower interest rates but not by much and continue to price in an additional move in the Spring (we see a 25bps cut in March)."
“The real risk is perhaps that a confident-sounding Yellen later this month brings forward market expectations for US rate rises; US-Canada spreads are in very-supportive territory and continue to suggest upside scope for USDCAD, particularly at the shorter end of the curve where the 2Y yield gap widened to +15bps premium for the USD Friday—the biggest gap since July 2007.”
“For now, USDCAD looks to be consolidating still.”
“We expect the USD to remain well-supported on weakness to the mid/upper 1.23 area near-term and for gains to pick up above 1.2540/50.”
“We remain longer-term bulls (looking for 1.30+ in the months ahead).”
Key Quotes
“Markets have adjusted very slightly expectations for lower interest rates but not by much and continue to price in an additional move in the Spring (we see a 25bps cut in March)."
“The real risk is perhaps that a confident-sounding Yellen later this month brings forward market expectations for US rate rises; US-Canada spreads are in very-supportive territory and continue to suggest upside scope for USDCAD, particularly at the shorter end of the curve where the 2Y yield gap widened to +15bps premium for the USD Friday—the biggest gap since July 2007.”
“For now, USDCAD looks to be consolidating still.”
“We expect the USD to remain well-supported on weakness to the mid/upper 1.23 area near-term and for gains to pick up above 1.2540/50.”
“We remain longer-term bulls (looking for 1.30+ in the months ahead).”