FXStreet (Barcelona) – FX Strategists at TD Securities, see upside potential for USD/CAD and downside risks for CAD/JPY.
Key Quotes
“The market is pricing in a near full chance that the Bank will need to ease further by the end of this year. Given the risk of a technical recession is high we would expect some of the Bank’s optimism to be pared back at next week’s meeting. We have warned since the April MPR that the Bank was too optimistic in its forecasts and that the risk of a cut by the BoC could not be ruled out.”
“In our view, we view the path of least resistance for USDCAD is higher especially as oil is under pressure. We would also expect that Treasuries outperform versus Canada as in a risk-off environment.”
“Look for CAD underperformance on the crosses, particularly versus traditional safe haven currencies such as the JPY. We see continued downside in CADJPY; we spot minor support at the figure but a breach below would likely open downside potential to the 96.30 area.”
(Market News Provided by FXstreet)