22 Jan 2014
Flash: USD/CAD fair value is 1.17; target at the upper 1.12s - TD Securities
FXstreet.com (San Francisco) - Shaun Osborne, Chief FX Strategist at TD Securities reaffirmed the bank remains bullish USD/CAD. He said USD/CAD fair value is 1.17; however he is targeting 'at least 1.12/1.13 area'.
Key Quotes:
A simple regression model using 5-year US-Canada spreads and Canadian terms of trade suggest a fair value estimate for USDCAD of nearly 1.17
We remain bullish on the outlook for USDCAD. The policy outlook favours more USD strength and more CAD weakness. And despite the significant slide in the CAD over the past few months, Governor Poloz signaled no concern about the exchange rate today.
From here, we can only see more upside for funds—at least to the 1.12/1.13 area (weak CPI data Friday will sink the CAD). Technically, we target the upper 1.12s. And there is very limited corrective potential for USDCAD from here; buyers may have settle for something in the 1.0950/1.10 range for now, if we get there at all.
Key Quotes:
A simple regression model using 5-year US-Canada spreads and Canadian terms of trade suggest a fair value estimate for USDCAD of nearly 1.17
We remain bullish on the outlook for USDCAD. The policy outlook favours more USD strength and more CAD weakness. And despite the significant slide in the CAD over the past few months, Governor Poloz signaled no concern about the exchange rate today.
From here, we can only see more upside for funds—at least to the 1.12/1.13 area (weak CPI data Friday will sink the CAD). Technically, we target the upper 1.12s. And there is very limited corrective potential for USDCAD from here; buyers may have settle for something in the 1.0950/1.10 range for now, if we get there at all.