USD/CAD room for extra upside – TDS

Strategists at TD Securities assessed the prospects for the pair following the disappointing GDP figures in Canada released on Tuesday.

Key Quotes

“The disappointing data reinforces our bias that the risks for USDCAD over the coming weeks remains asymmetrically tilted to the upside”.

“With the front-end of the curve still pricing in a decent chance of a rate hike in January, growth moderating in line with Poloz's cautious narrative, CAD's correlation to data surprises very high, and CAD longs yet to be meaningfully reduces, CAD remains vulnerable to further losses”.

“Dips in USDCAD should be shallow but we eye a move to 1.30 as the path of least resistance. This should be a notable barrier on the topside however”.