5 Mar 2015
Core risks to CAD – Scotiabank
FXStreet (Barcelona) - Camilla Sutton CFA, CMT, Chief FX Strategist at Scotiabank, lists the core risks to CAD, with USD/CAD holding on to yesterday’s gains after the BoC left rates unchanged.
Key Quotes
“CAD is holding on to yesterday’s gains, but still trading within its six week range.”
“As expected the BoC left policy rates on hold yesterday; however the tone of the statement was more neutral than expected driving a CAD rally.”
“The market is now pricing in just a 40% risk of a second interest rate cut this year. The BoC is in wait-and-see mode, leaving the central bank data dependent.”
“EUR is at fresh 11-year lows, and both JPY and GBP are being pressured lower, in this context and should broad USD strength be sustained, it will prove difficult for CAD to rally substantially from current levels.”
“The core risks to CAD from here are: 1) the broad USD move; 2) oil prices; 3) domestic data, including employment, infla-tion and trade; 4) U.S. data, particularly an improvement in labour mar-kets and stabilization in core CPI that will pull forward Fed expectations towards June; and 5) CAD sentiment”
Key Quotes
“CAD is holding on to yesterday’s gains, but still trading within its six week range.”
“As expected the BoC left policy rates on hold yesterday; however the tone of the statement was more neutral than expected driving a CAD rally.”
“The market is now pricing in just a 40% risk of a second interest rate cut this year. The BoC is in wait-and-see mode, leaving the central bank data dependent.”
“EUR is at fresh 11-year lows, and both JPY and GBP are being pressured lower, in this context and should broad USD strength be sustained, it will prove difficult for CAD to rally substantially from current levels.”
“The core risks to CAD from here are: 1) the broad USD move; 2) oil prices; 3) domestic data, including employment, infla-tion and trade; 4) U.S. data, particularly an improvement in labour mar-kets and stabilization in core CPI that will pull forward Fed expectations towards June; and 5) CAD sentiment”