The AUD/CAD has spent a decent 8.4% of its trading days since the 1983 AUD float above 1.06, though the vast majority of this was in 1984. “There is no reason to expect AUD/CAD to return to its 0.94 post-float average any time soon, with Canada’s terms of trade not nearly as stretched in historical context as Australia’s and Canada’s recovery still held back by the sluggish US economy.” he adds. Canada is a lot more reliant on the US as an export destination (74%) than Australia is on China (25%).
Furthermore, relative speculative positioning is a mild weight on AUD/CAD. IMM specs have been more inclined to rebuild AUD longs than CAD as global risk appetite has improved. “Specs are likely to move swiftly to establish CAD longs if Canadian data encourage tightening expectations.” the team projects.