At Thursday's NY close Morgan.........>

DOLLAR-CANADA: At Thursday's NY close Morgan Stanley entered a long USDCAD limit

order at 1.2650, with a target of 1.3100 and a stop at 1.2510.

- MS "wait for a pullback before entering. The prospects for CAD remain

uncompelling. The BoC's dovish turn suggests that it is seeking to let the

economy "run hot", bolstering growth and inflation in order to support a placid

deleveraging process. The prospect for data deceleration continues, with the

passthrough of fiscal stimulus from 2017 beginning to wane, and the housing

market cooling due to the new mortgage regulations. Policy divergence between

the BoC and the Fed should keep interest rate differentials in favor of USDCAD

upside. The BoC has stated that it sees exports as a source of future growth

relative to waning consumption growth, suggesting it would be more tolerant of

currency weakness in terms of aiding export competitiveness. A risk to this

trade is that Canadian data accelerate, prompting a hawkish BoC response

supporting CAD strength."