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TD Securities entered a long..........>

DOLLAR-CANADA: TD Securities entered a long USD/CAD position on Monday at
C$1.3115, with a target of C$1.3500 and a stop-loss of C$1.2880.
- TD note that "with markets priced for a July BoC hike & the CAD having enjoyed
a rally recently, we think much of the good news is in the price setting up for
a "buy the rumor/sell the fact" outcome. We think CAD is one of the most poorly
situated currencies in the G10 as trade tensions have escalated. Indeed with
NAFTA talks on hiatus, trade tariffs underway with little reprieve on the
horizon and Canada running a large negative external balance, CAD's return
profile remains asymmetrically skewed to the downside. We think it is a high bar
for a tone to emerge from the BoC meeting that supports CAD from here. Now that
rates are off the floor, household indebtedness high and interest payments
accelerating, consumption spending will not be as robust as it was in the past,
making it more difficult for the economy to obtain near-trend growth and deliver
hikes in quick succession. As such, we see USDCAD remaining north of C$1.3000
over the balance of the year. Daily uptrend support is located near C$1.3050
with interim resistance located near the C$1.3400 YTD high."
MNI London Bureau | +44 0203-865-3809 |
MNI London Bureau | +44 0203-865-3809 |

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