9 Dec 2014
USD/CAD slave to market flows – TDS
FXStreet (Barcelona) - According to Shaun Osborne and Martin Schwerdtfeger, FX Strategists at TD Securities, a data vacuum will leave USD/CAD as a slave to market flows and technicals today.
Key Quotes
“Following the lead of other majors such as EUR, JPY, and AUD, the CAD broke a fresh cycle-low against the USD yesterday and remained better offered as the CAD lagged behind a rebound in the EUR and JPY over the balance of the session. The CAD slipped a little lower still through the overnight session to briefly test above 1.15 before easing back and remains a relative under-performer on the session.”
“Lower crude price weighed on the CAD overall yesterday and even with prices modestly higher on the day so far, we still think that news of more price discounting by Middle Eastern producers and ongoing focus on supply, rather than demand, dynamics will keep oil trading with a heavy undertone for now. Neither the CAD nor domestic yields took much notice of the better than expected November Housing Starts data. Lower oil prices and wider interest rate spreads remain powerful supportive elements for USDCAD.”
“A data vacuum at home and only second– or third-tier indicators in the US will leave USDCAD as a slave to market flows and technicals today. Option expiries are concentrated in the 1.1400-50/60 region, which may give the market room to edge a little lower in the early part of our session but losses should remain shallow and short-lived.”
“The broader bull trend in USDCAD remains strong and the CAD looks overvalued even at these levels relative to basic drivers (spreads, commodities) of the exchange rate. Out spot FV estimate for USDCAD this morning has risen to 1.1752.”
Key Quotes
“Following the lead of other majors such as EUR, JPY, and AUD, the CAD broke a fresh cycle-low against the USD yesterday and remained better offered as the CAD lagged behind a rebound in the EUR and JPY over the balance of the session. The CAD slipped a little lower still through the overnight session to briefly test above 1.15 before easing back and remains a relative under-performer on the session.”
“Lower crude price weighed on the CAD overall yesterday and even with prices modestly higher on the day so far, we still think that news of more price discounting by Middle Eastern producers and ongoing focus on supply, rather than demand, dynamics will keep oil trading with a heavy undertone for now. Neither the CAD nor domestic yields took much notice of the better than expected November Housing Starts data. Lower oil prices and wider interest rate spreads remain powerful supportive elements for USDCAD.”
“A data vacuum at home and only second– or third-tier indicators in the US will leave USDCAD as a slave to market flows and technicals today. Option expiries are concentrated in the 1.1400-50/60 region, which may give the market room to edge a little lower in the early part of our session but losses should remain shallow and short-lived.”
“The broader bull trend in USDCAD remains strong and the CAD looks overvalued even at these levels relative to basic drivers (spreads, commodities) of the exchange rate. Out spot FV estimate for USDCAD this morning has risen to 1.1752.”