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Canadian dollar to face road-blocks - TD Securities

FXStreet (Guatemala) - Shaun Osbourne, Chief FX Strategist at TD Securities explained that a sharp losses for stocks on heavy volume trading and a surge in “safe-haven” bonds yesterday made for an uncomfortable time in the FX markets.

Key Quotes:

“We started yesterday’s session looking at rising upside risks for USDCAD but very quickly saw funds in retreat and back under 1.13 as US yields plunged in one of the biggest intraday declines (in yields) in quite some time."

"The stalled move up in USD/CAD may mean a little more range-trading in store for funds near-term but we think road-blocks to a significant CAD rebound are starting to look formidable at this point.

“1) weaker crude oil prices suggest that the CAD’s recent outperformance on the crosses will correct”.

“2) rising volatility and risk aversion may mean more headwinds for the CAD and more downside pressure on CAD/JPY specifically”.

“The cross has already corrected much of the August/September rally and a full retracement back to 92.75/80 may follow if volatility remains high. Given that part of the market’s latest anxiety attack may be associated with the impending end of the Fed’s QE program, that looks a possibility."

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