8 Jul 2014
USD/CAD based with bullish bias - TD Securities
FXStreet (Guatemala) - Shaun Osbourne, Chief FX Strategist at TD Securities notes the conditions surrounding funds.
Key Quotes
"Funds made a run towards 1.07 in overnight trading, but stopped just short of the mark at around 1.0695. In spite of that, the pair is still holding above yesterday's close, which coincided with the high for the day."
"After a few days clocking-in lows in the 1.0625/30 area, USD/CAD appears to have formed a base around those levels and it looks ready to move higher more decisively”.
"Although US Treasury yields have moved lower post non-farm payrolls,
Canadian yields have declined in tandem, particularly following yesterday's weak batch of data and the soft undertone that transpired from the BoC's Business Outlook Survey”.
“The FOMC Minutes from the June 17-18 meeting tomorrow and Canadian employment numbers on Friday are the key events to watch this week, ahead of the BoC's FAD next week. Our expectation for a below consensus employment reading – although one that show should a better balance between temporary and full employment – should continue to fuel the move higher in USDCAD ahead of the Bank's announcement. A close to the week in the mid- to high-1.07s appears reasonable under that scenario. On the latter, we still see plenty of room for monetary policy makers to strike a cautious tone, despite the recent uptick in inflation, and this should further consolidate the move higher in funds."
Key Quotes
"Funds made a run towards 1.07 in overnight trading, but stopped just short of the mark at around 1.0695. In spite of that, the pair is still holding above yesterday's close, which coincided with the high for the day."
"After a few days clocking-in lows in the 1.0625/30 area, USD/CAD appears to have formed a base around those levels and it looks ready to move higher more decisively”.
"Although US Treasury yields have moved lower post non-farm payrolls,
Canadian yields have declined in tandem, particularly following yesterday's weak batch of data and the soft undertone that transpired from the BoC's Business Outlook Survey”.
“The FOMC Minutes from the June 17-18 meeting tomorrow and Canadian employment numbers on Friday are the key events to watch this week, ahead of the BoC's FAD next week. Our expectation for a below consensus employment reading – although one that show should a better balance between temporary and full employment – should continue to fuel the move higher in USDCAD ahead of the Bank's announcement. A close to the week in the mid- to high-1.07s appears reasonable under that scenario. On the latter, we still see plenty of room for monetary policy makers to strike a cautious tone, despite the recent uptick in inflation, and this should further consolidate the move higher in funds."