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4 Jun 2015
USD/CAD stable, but risks ahead tomorrow – TDS
FXStreet (Barcelona) - FX Strategists at TD Securities note that USD/CAD trades well around their fair value estimate, but tomorrow’s Canadian data might pose risk for the pair.
Key Quotes
“Amidst the fixed income meltdown and carnage in FX markets, USDCAD has held up rather well. The CAD has underperformed on the crosses this week particularly versus the EUR, scandies and GBP.”
“We do not foresee much impetus for USDCAD to get shaken up today ahead of tomorrow’s dual employment reports but the May Ivey PMI is a potential risk. While it is one of our least favorite indicators (due to its lack of cyclicality with the broader economy), it tends to move spot. So, for what it is worth, we see a downside risk to the market’s estimate of a decline to 55.0 (from 58.2) and estimate a print closer to 54.0.”
“We see support for USDCAD at the 1.24 figure which is essentially the 100-DMA and the key level lows that USDCAD tested through most of the year until breaking lower in mid-April as we had predicted.”
“We do not see a mis-valuation for spot and our daily model estimate suggests that funds is about correctly valued (FV ~ 1.2460).”
Key Quotes
“Amidst the fixed income meltdown and carnage in FX markets, USDCAD has held up rather well. The CAD has underperformed on the crosses this week particularly versus the EUR, scandies and GBP.”
“We do not foresee much impetus for USDCAD to get shaken up today ahead of tomorrow’s dual employment reports but the May Ivey PMI is a potential risk. While it is one of our least favorite indicators (due to its lack of cyclicality with the broader economy), it tends to move spot. So, for what it is worth, we see a downside risk to the market’s estimate of a decline to 55.0 (from 58.2) and estimate a print closer to 54.0.”
“We see support for USDCAD at the 1.24 figure which is essentially the 100-DMA and the key level lows that USDCAD tested through most of the year until breaking lower in mid-April as we had predicted.”
“We do not see a mis-valuation for spot and our daily model estimate suggests that funds is about correctly valued (FV ~ 1.2460).”