BOC SAYS DOESN'T NEED TO ALTER PATH OF QT RIGHT NOW

this is a test, please ignore

MNI BRIEF: Text of Bank Of Canada Interest-Rate Decision

MNI China Daily Summary: Wednesday, July 24

MNI: PBOC Net Drains CNY203.9 Bln Via OMO Wednesday

MNI: PBOC Sets Yuan Parity Higher At 7.1358 Weds; -0.98% Y/Y

New Home Sales Activity And Prices Continue To Cool

US EIA: CRUDE OIL STOCKS EX SPR -3.74M TO 436.5M JUL 19 WK

Services PMI Gains Continue To Diverge From Soft Manufacturing

RPT-MNI: Canada Sticks To Fiscal Anchors, Spends Chunk Of Windfall

© 1982-2024 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

USDCAD Moves Nearer Bull Trigger With Positioning Stretched Pre-BoC

CANADA
Homepagemarkets-real-timeBulletMarketsForeign Exchange Bullets Bank of Canada Market News
  • USDCAD earlier touched a new recent high of 1.3800 with equity futures under pressure.
  • It extended yesterday’s breach of prior highs at 1.3775 and cleared resistance at 1.3792 (Jun 11 high) for another strong step towards the bull trigger at 1.3846 (Apr 16 high).
  • Ahead of today’s BoC decision, the 14-day RSI at 67.1 is getting close to overbought conditions.
  • Further, CAD net shorts were at historical extremes last week (47% of open interest) in positioning that we feel could limit near-term sensitivity to any dovish surprises and at risk that the Bank is less dovish than some expect – see the preview here.
  • Today’s climb is more USD-focused, with EURCAD now lower on the day at 1.4940 (post-weak German PMI) but still close to yesterday’s latest ytd high of 1.4996. It pierced downtrend resistance drawn from 2023 highs ahead of last week’s ECB decision and opened key targets of 1.5045 and 1.5113 for the cross.
  • The Canadian trade-weighted exchange rate is very close to ytd lows, less than 0.1% above the Apr 16 low on the Deutsche Bank nominal index. That’s a 0.9% depreciation since the Jun 5 decision and 1.6% since shortly before the publication of the April MPR ahead of today’s fresh forecasts.

Deutsche Bank Canadian dollar trade-weighted exchange rateSource: Bloomberg

229 words

To read the full story

Close

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.
  • USDCAD earlier touched a new recent high of 1.3800 with equity futures under pressure.
  • It extended yesterday’s breach of prior highs at 1.3775 and cleared resistance at 1.3792 (Jun 11 high) for another strong step towards the bull trigger at 1.3846 (Apr 16 high).
  • Ahead of today’s BoC decision, the 14-day RSI at 67.1 is getting close to overbought conditions.
  • Further, CAD net shorts were at historical extremes last week (47% of open interest) in positioning that we feel could limit near-term sensitivity to any dovish surprises and at risk that the Bank is less dovish than some expect – see the preview here.
  • Today’s climb is more USD-focused, with EURCAD now lower on the day at 1.4940 (post-weak German PMI) but still close to yesterday’s latest ytd high of 1.4996. It pierced downtrend resistance drawn from 2023 highs ahead of last week’s ECB decision and opened key targets of 1.5045 and 1.5113 for the cross.
  • The Canadian trade-weighted exchange rate is very close to ytd lows, less than 0.1% above the Apr 16 low on the Deutsche Bank nominal index. That’s a 0.9% depreciation since the Jun 5 decision and 1.6% since shortly before the publication of the April MPR ahead of today’s fresh forecasts.

Deutsche Bank Canadian dollar trade-weighted exchange rateSource: Bloomberg