CAD extending Wednesday’s gains – Scotiabank
|The Canadian Dollar (CAD) is nosing ahead this morning, extending yesterday’s gains through the upper 1.37s and staking a claim on being one of the better-performing G10 currencies on the week so far, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.
US/Canada 2Y yield spread pushes to fresh low w/ FV at 1.3606
"Sliding US short-term yields, with the US 2Y bond yield back to the low seen in April, and narrowing spreads (the 2Y US/Canada swap spread has dipped to just over 80bps, the narrowest since last October), account for some of the improvement in the CAD at least—and it may have further to go as the CAD remains undervalued (by our measure of the CAD’s estimated short-term equilibrium)."
"Out fair value estimate sits at 1.3606 currently. Spot losses are extending below the 100-day MA (which has represented moderate support/resistance for the USD in the recent past) as USD losses from last Friday’s bearish outside range reversal extend."
"Loss of support around 1.3750 (40-day MA currently) in the short run would be a more meaningful sign of short-term CAD strength and point to USD/CAD losses extending towards the upper 1.36s—the base of the broader consolidation range in place since early July. Resistance is 1.3800/15."
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.