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13 Feb 2014
Flash: USD/CAD correction to lower 1.09 not ruled out - TD Securities
FXStreet (Barcelona) - Shaun Osbourne, Chief FX Strategist at TD Securities, does not rule out a correction to the low 1.09s prior to another bull run.
Key Quotes
"USDCAD is holding in a tight range around the 1.10 area , with support in the upper 1.09 area continuing to underpin the market. The underlying tone in funds remains corrective and may remain so until we get more domestic data—starting next week with retail sales that are liable to look ugly (due to the December ice storm in Ontario) and CPI that is likely to show price growth still stuck at the low end of the BoC’s target range."
"The CAD has picked up a little support in the aftermath of the Federal budget this week but the improved fiscal balances do not alter our view on the outlook for a still weaker CAD through the first half of this year at least. Improved budget data were widely telegraphed in the past few weeks and the return to budget surplus in 2015 was widely expected and a stated goal of the government. Canada’s AAA credentials remain intact but that doesn’t help an economy experiencing sluggish growth and low inflation pressure."
"While USDCAD is finding consistent support in the upper 1.09s, we still rather think the risk of a little more softness over the course of the next week or so could still see the low 1.09 area retested before the next leg higher (fuelled by soft domestic data reports and a market that starts to look towards the March 5th BoC policy meeting) commences."
Key Quotes
"USDCAD is holding in a tight range around the 1.10 area , with support in the upper 1.09 area continuing to underpin the market. The underlying tone in funds remains corrective and may remain so until we get more domestic data—starting next week with retail sales that are liable to look ugly (due to the December ice storm in Ontario) and CPI that is likely to show price growth still stuck at the low end of the BoC’s target range."
"The CAD has picked up a little support in the aftermath of the Federal budget this week but the improved fiscal balances do not alter our view on the outlook for a still weaker CAD through the first half of this year at least. Improved budget data were widely telegraphed in the past few weeks and the return to budget surplus in 2015 was widely expected and a stated goal of the government. Canada’s AAA credentials remain intact but that doesn’t help an economy experiencing sluggish growth and low inflation pressure."
"While USDCAD is finding consistent support in the upper 1.09s, we still rather think the risk of a little more softness over the course of the next week or so could still see the low 1.09 area retested before the next leg higher (fuelled by soft domestic data reports and a market that starts to look towards the March 5th BoC policy meeting) commences."