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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
CANADA
- USDCAD is back close to earlier highs of 1.3845 as it remains right at the high end of recent ranges after Thu/Fri joint highs of 1.3849.
- Those highs marked tentative clearance of a key 1.3846 (Jun Apr 16 high), opening Nov 2023 levels for resistance seen at 1.3855 (Nov 10, 2023 high) and another important 1.3899 (Nov 1, 2023 high).
- The pair sits in overbought conditions for a third straight day, last seen in April and before that Aug 2023 in conditions that have historically struggled to be maintained and could come under pressure from any dovish FOMC surprises on Wednesday.
- Latest CFTC data showed a further build in CAD net shorts as of Jul 23, with 51% of open interest the largest net short position since 2007 and with leveraged funds the most net short in the series history.
- This came the day before the BoC delivered a not fully priced 25bp cut along with dovish commentary. The latter possibly helped trigger a further build in net shorts but we believe the heavily bearish positioning was a strong factor behind the initially mild reaction to the meeting.
- As for historical trends, the CAD real effective exchange rate is on the low side at -2.5% below both five- and ten-year averages, but not at extremes and from this angle alone looks less compelling than its high beta Scandinavian peers.
- Today sees a light docket with particularly low option expiry, leaving headlines and broader risk sentiment in the driving seat.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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