USD/CAD: Brexit has not materially impacted yet - TDS

Matías Salord FXStreet

According to Mark McCormick, North American Head of FX Strategy at TDS, valuation and market positioning suggest there is further scope for USD/CAD; their initial target is at 1.31.

Key Quotes:

“USD/CAD is consolidating a bit in the aftermath of the Brexit vote. The single currency reached an intraday high of 1.31 before pulling back below 1.30. The knee-jerk response to the overnight vote is for further deterioration in risk appetite but it appears broader financial contagion has been limited. We believe the risk channel (lower equities and commodities) will have the biggest impact on CAD since Canada’s economic ties with the UK are small.”

“Valuation and market positioning ahead of the vote suggest there is further scope for USD/CAD to push higher given limited risk premium and an overhang of long positioning. Our initial target is a move to 1.31.”

“The unexpected shock of Brexit has not materially impacted USD/CAD just yet. The concentration of FX moves has focused on European currencies given political and economic ramifications of the vote for the continent of Europe. That said, we do not expect USD/CAD to remain silent for too long."

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

EUR/USD flirts with daily highs, retargets 1.1900

EUR/USD regains upside traction, returning to the 1.1880 zone and refocusing its attention to the key 1.1900 barrier. The pair’s slight gains comes against the backdrop of a humble decline in the US Dollar as investors continue to assess the latest US CPI readings and the potential Fed’s rate path.

GBP/USD remains well bid around 1.3650

GBP/USD maintains its upside momentum in place, hovering around daily highs near 1.3650 and setting aside part of the recent three-day drop. Cable’s improved sentiment comes on the back of the Greenback’s irresolute price action, while recent hawkish comments from the BoE’s Pill also collaborate with the uptick.

Gold clings to gains just above $5,000/oz

Gold is reclaiming part of the ground lost on Wednesday’s marked decline, as bargain-hunters keep piling up and lifting prices past the key $5,000 per troy ounce. The precious metal’s move higher is also underpinned by the slight pullback in the US Dollar and declining US Treasury yields across the curve.

Crypto Today: Bitcoin, Ethereum, XRP in choppy price action, weighed down by falling institutional interest

Bitcoin's upside remains largely constrained amid weak technicals and declining institutional interest. Ethereum trades sideways above $1,900 support with the upside capped below $2,000 amid ETF outflows.

Week ahead – Data blitz, Fed Minutes and RBNZ decision in the spotlight

US GDP and PCE inflation are main highlights, plus the Fed minutes. UK and Japan have busy calendars too with focus on CPI. Flash PMIs for February will also be doing the rounds. RBNZ meets, is unlikely to follow RBA’s hawkish path.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.