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Forex Flash: USD/CAD to trend higher in the coming weeks - BBH

The Canadian dollar has been the second weakest currency against the US dollar since mid-January, as noted by the BBH analyst team. "With a 4.3% decline, it is only exceeded by sterling's 6.2% decline".

"We have noted that the net speculative position has turned to a net short Canadian dollar position for the first time since last August", BBH says. "BOC Governor Carney's timing in going to the UK may be prescient as Canada's financial challenges with housing market valuation issues, household debt levels, and potentially deflationary impulses all following a credit downgrade of the major Canadian banks in late January".

Against this backdrop, the BBH team projects potential for the US dollar to continue to trend higher to CAD1.0450-CAD1.0500 in the coming weeks.

Commodities Brief – Precious metals trade sideways after upbeat US data, crude oil surrenders earlier gains but holds above 90.00

Gold has experienced an uneven string of trading sessions Wednesday, as investors grappled increased demand from Asia and the publication of upbeat US ADP Employment data. The yellow metal has refused to budge from its narrow consolidation thus far, held just below the 1579.00 level (intraday maximum). Technically speaking, gold is trading at its 200-day SMA, awaiting further signals to move in either direction. At the time of writing, the spot price of gold is hovering at USD $1576.95 per oz. at the onset of the US open.
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Forex Flash: CAD may be expecting too much BoC risk – TD Securities

The constructive mood about the markets today is not spilling over into the CAD as the currency gets ahead of the BoC decision and statement "and the fact that USD/CAD is holding close to 1.03 suggests that market participants are pricing in a high risk of a further moderation in the BoC’s language", according to TD Securities analysts, that are only expecting only a nod to weaker growth trends from the BoC.
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