USD/CAD neutral bias near term – Scotiabank

Eric Theoret, FX Strategist at Scotiabank, noted the neutral perspective around the pair in the near term.

Key Quotes

“Sentiment is likely to remain a dominant driver into the end of the week and we highlight risks surrounding the path for the 2Y yield spread as market participants consider the referendum result and its implications for the Fed. CAD risk reversals appear relatively steady with a sizeable premium for protection against downside risk”.

“USDCAD has fallen below its 50 day (1.2856) with a decline toward the mid-point of its range from early May. We remain biased to medium-term gains however we acknowledge the recent setback presented by last week’s remarkable turn and its continuation into Monday NA open”.