Back
27 Apr 2015
USD/CAD keeps the negative view – JP Morgan
FXStreet (Edinburgh) - In the opinion of analysts at JP Morgan, the negative perspective remains intact in the pair.
Key Quotes
“We bought CAD last week as a direct play on the risk of a more extended bounce in oil prices, a view which is so far tracking”.
“The last IMM report showed no net change in CAD positions last week, so it looks as though the short-covering process has some way to go yet”.
“As far as valuation is concerned the decline in USD/CAD in recent weeks is no more than would be justified by the repricing of BoC rate cut prospects and the move in oil”.
“Notably the rate market has halved the size of the BoC rate cut that it expects by yearend compared to the market pricing in March; only 17bp is now discounted”.
“Meanwhile, WCS crude is up by 52% from the mid-March trough”.
Key Quotes
“We bought CAD last week as a direct play on the risk of a more extended bounce in oil prices, a view which is so far tracking”.
“The last IMM report showed no net change in CAD positions last week, so it looks as though the short-covering process has some way to go yet”.
“As far as valuation is concerned the decline in USD/CAD in recent weeks is no more than would be justified by the repricing of BoC rate cut prospects and the move in oil”.
“Notably the rate market has halved the size of the BoC rate cut that it expects by yearend compared to the market pricing in March; only 17bp is now discounted”.
“Meanwhile, WCS crude is up by 52% from the mid-March trough”.