USD/CAD has 1.3000 in the crosshairs – TDS

FXStreet (Edinburgh) - In the opinion of strategists at TD Securities, the pair could test the 1.3000 area in the medium term.

Key Quotes

“While swings in energy prices have dominated the headlines in recent weeks and provided significant impetus for shifts in USDCAD, US-Canadian interest rate differentials are slowly but surely moving in a very USD-supportive fashion”.

“Rate spreads are positive for the USD (versus the CAD) across the yield curve and constitute a significant source of support for USDCAD”.

“Our forecasts for US and Canadian 2y bond yields alone suggests USDCAD could move towards 1.40 late in 2016”.

“We suggest long USDCAD at current spot (1.2559), targeting 1.30 (risking 1.2475)”.