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USD/CAD shorts covered ahead of Fed - TD Securities

FXStreet (Guatemala) - Shaun Osbourne, Chief FX Strategist at TD Securities notes the conditions surrounding the USD/CAD ahead of the FOMC.

Key Quotes

"Governor Poloz’s comments yesterday in Quebec offered very little new in terms of the central bank’s thinking on the exchange rate—in fact, the comments served more as a reiteration of what has been the bank’s standard operating procedure for many years—non-interventionist and allowing market forces to determine the exchange rate, which remains a powerful shock absorber against external shocks. Nothing new there."

"The Q&A was a little more revelatory in that the governor did his level best to maintain an aggressively neutral message, caveating the acknowledgement that certain aspects of the domestic economy had improved with reminders that the economy had shown similar promise before and not delivered or that there was still a long way to go. The clear message here is that the BoC is in wait and see mode, regardless of what is happening down at the Federal Reserve. Rates will remain on hold for now."

“USD shorts are covered ahead of the Fed. There are no domestic data releases today."

"We still think the USD may struggle to gain a lot more altitude just yet and we still rather think the greenback is subject to some seasonal headwinds that may yet see funds trade back on a 1.08 handle in the next couple of weeks. We are carefully monitoring price action for buying opportunities though as we fully expect USD/CAD to trade higher—retesting the 1.12 area— into the end of the year."

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