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USDCAD: Continued to correct lower, advances rejected - TDS

FXStreet (Delhi) – Ned Rumpeltin, European Head of Currency Strategy at TD Securities, suggests that USDCAD has continued to correct lower after last week’s move above 1.3450 was resolutely rejected.

Key Quotes

“In addition to broad USD weakness, particularly against higher-beta currencies, CAD’s advance has been supported, we think, by firm energy prices and interest rate differentials that continue to move in Canada’s favor. Indeed, our fair-value model points to 1.2797 as the latest centre of gravity for spot, although we think the 1.3010/15 region may provide decent support in the near term.”

“With a quiet data and events calendar for Canada, the CAD will remain dependent upon broader USD moves for overall direction. This week, Tuesday’s international merchandise trade report will be an important indicator as non-commodity exports appear to have taken on an added significance among policymakers in recent months. This suggests we could see an increase in FX-related commentary should CAD strength gather momentum.”

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