CAD: Scope For USD/CAD To Recover Once Positioning Is More Balanced – Credit Agricole

Credit Agricole CIB FX Strategy Research notes that after factoring in the BoC, rhetoric the 1.5% rally in the CAD after the central bank announcement yesterday looks outsized relative to a 5bp move in Canadian 2Y rates (the prior 40bp move in rates was accompanied by a 4% gain in the CAD).

“This suggests that FX markets were caught positioned short CAD before the decision, which suggests scope for some USD/CAD recovery once positioning is more balanced.

While acknowledging the BoC’s clear resolve to normalize policy, we continue to question whether the ongoing strength in the CAD and a tightening in financial conditions will weigh on inflation and compromise the BoC’s tightening plans,” CACIB argues.

Source: Credit Agricole CIB Research

The article is published by one of the foremost sources of Forex trading information. Link to the original article above.

from eFXNews

from Online Forex Trading Resource
View thesource article here


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s