Morgan Stanley entered a short CHFCAD.........>

FOREX: Morgan Stanley entered a short CHFCAD position at the NY close on

Thursday, with a target of 1.26 and a stop at 1.33, spot deals at ~1.3080 last.

Morgan Stanley "continue to like tactical CAD longs, particularly against low

yielding currencies like CHF. The BoC Business Outlook Survey suggested that

investment trends remained strong and that inflationary pressures continued to

build." Their economists think "Canadian growth and inflation data tracking

broadly in line with the BoC's outlook could form a case for a rate hike at the

April meeting, The market is only pricing in a 14% likelihood of a rate move in

April, creating upside risks for CAD. In addition, constructive news over NAFTA

negotiations suggests the US may be approaching an acceptable agreement with its

trading partners, which should lead to a re-pricing of the trade risk premium in

CAD. CHF should stay on the back foot given our expectation for a risk rebound,

with SNB policymakers including Maechler and Moser suggesting the central bank

will remain cautious for the time being. The risk to the trade is a dovish shift

from the BoC, leading to CAD weakness"