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6 Mar 2014
Flash: Short covering in USD/CAD - BMO Capital
FXStreet (Guatemala) - Stephen Gallo, European Head of Currency Strategy at BMO Capital said, ""Very recent price action in USD/CAD suggests that the short-CAD covering we had been highlighting as a factor since the start of the week has been reserved until after the BoC".
Key Quotes
"Our hunch is that it’s not entirely finished yet. So although we do expect very good support 1.095-1.1025, a very weak US employment report tomorrow will put the USD quickly on the defensive versus the CAD."
"The main scrutiny and focus tomorrow is going to be on the US data, because of what it could mean for the ‘taper’ and because the US 10-year yield is not far from its 2014 lows. The outcome of Canadian employment, on the other hand, should simply restrain or exaggerate the magnitude of the initial USD/CAD move stemming from the US data”.
Key Quotes
"Our hunch is that it’s not entirely finished yet. So although we do expect very good support 1.095-1.1025, a very weak US employment report tomorrow will put the USD quickly on the defensive versus the CAD."
"The main scrutiny and focus tomorrow is going to be on the US data, because of what it could mean for the ‘taper’ and because the US 10-year yield is not far from its 2014 lows. The outcome of Canadian employment, on the other hand, should simply restrain or exaggerate the magnitude of the initial USD/CAD move stemming from the US data”.