9 Jan 2014
Flash: CAD weakness well justified - TDS
FXstreet.com (Bali) - CAD weakness is justified on spreads as fundamentals, notes Shaun Osborne, Chief FX Strategist at TD Securities.
Key Quotes
"New cycle lows for CAD reflect less-supportive rate spreads versus the USD, even if the tracking is imprecise and spot/spread correlations are fairly loose currently."
"Spreads are moving against the CAD, with the real squeeze coming from higher US yields rather than softer Canadian rates. A further shift in BoC policy bias risks pushing the CAD lower still."
"Fundamentally, CAD weakness is justified, based on spreads and terms of trade; there is no obvious misalignment in the FX rate that suggests a sharp rebound is imminent."
Key Quotes
"New cycle lows for CAD reflect less-supportive rate spreads versus the USD, even if the tracking is imprecise and spot/spread correlations are fairly loose currently."
"Spreads are moving against the CAD, with the real squeeze coming from higher US yields rather than softer Canadian rates. A further shift in BoC policy bias risks pushing the CAD lower still."
"Fundamentally, CAD weakness is justified, based on spreads and terms of trade; there is no obvious misalignment in the FX rate that suggests a sharp rebound is imminent."