The Canadian dollar (CAD) is soft, down 0.3% compared to the US Dollar (USD) and underperforming most G10 currencies in a large USD force environment, extending the post-Nourri decline on Wednesday, the chief strategist of the scotia-bank, Shaun Osborne.
Larger deviations offer a short -term contrary wind
“The prospects for the relative policy of the central bank seems to dominate as the short -term engine of the CAD, expanding the differences in interest in favor of the USD. The propagation of yield of 2 years Canadian has widened around 20 BPTS in last week, acting as a front wind which clearly slowed down the recent rhythm of the resistance to CAD.”
“We had noted that the CAD had negotiated somewhat above our assessment of its fair value. This last decline in the CAD has reduced the gap, and it is now negotiated much closer to our USDCAD FV to 1.39. The interior version calendar on Thursday is limited to the BOC financial stability report (10h he). “.
“The USD / CAD has not yet exploded its range in mid-April, almost linked between the support around 1,3750 and the resistance around 1,3,900. A breakdown would find additional resistance in the middle of 1.39 s, around the decline at 61.8% of the September-February record. We continue to wait for the support around 1.3750.”
