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18 Mar 2014
USD/CAD eyes 1.1100 on Poloz speech
FXStreet (Edinburgh) - The USD/CAD is now trading on a firmer tone following the dovish comments by BoC’s Poloz, climbing to 1.1090 from the mid-1.10s.
USD/CAD stronger, on its way to 1.1100?
Spot found oxygen after BoC Governor S.Poloz said the Canadian economy is likely to underperform during the first quarter (mainly due to weather), amidst a more ample context of slow growth, low interest rates (rate cut?) and consumer prices taking their time to return to the central bank’s 2% target. The banker also underlined that the risk of global stagnation must be ‘taken seriously’. The CAD weakened after the statement, lifting spot to fresh intraday highs near 1.11 the figure. “We expect topside potential in USDCAD to remain very limited again, particularly between 1.105 and 1.112. The current most important driver of USDCAD, the 5yr swap rate differential, suggests the pair is pretty fairly valued just above 1.100. At the same time, short-term FX investors are probably about neutral to very slightly CAD short in terms of positioning”, commented Stephen Gallo, European Head FX Strategy at BMO.
USD/CAD levels to consider
The pair is now up 0.29% at 1.1085 with the next resistance at 1.1111 (high Mar.14) followed by 1.1154 (high Mar.12) and then 1.1160 (high Feb.27). On the flip side, a breakdown of 1.1018 (daily cloud top) would aim for 1.0955 (low Mar.6) and then 1.0911 (low Feb.19).
USD/CAD stronger, on its way to 1.1100?
Spot found oxygen after BoC Governor S.Poloz said the Canadian economy is likely to underperform during the first quarter (mainly due to weather), amidst a more ample context of slow growth, low interest rates (rate cut?) and consumer prices taking their time to return to the central bank’s 2% target. The banker also underlined that the risk of global stagnation must be ‘taken seriously’. The CAD weakened after the statement, lifting spot to fresh intraday highs near 1.11 the figure. “We expect topside potential in USDCAD to remain very limited again, particularly between 1.105 and 1.112. The current most important driver of USDCAD, the 5yr swap rate differential, suggests the pair is pretty fairly valued just above 1.100. At the same time, short-term FX investors are probably about neutral to very slightly CAD short in terms of positioning”, commented Stephen Gallo, European Head FX Strategy at BMO.
USD/CAD levels to consider
The pair is now up 0.29% at 1.1085 with the next resistance at 1.1111 (high Mar.14) followed by 1.1154 (high Mar.12) and then 1.1160 (high Feb.27). On the flip side, a breakdown of 1.1018 (daily cloud top) would aim for 1.0955 (low Mar.6) and then 1.0911 (low Feb.19).