CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

Loonie remains 2nd best

Article By: ,  Financial Analyst
September 24, 2014 5:14 PM

As the US dollar rally takes center stage in global currency markets, let’s shed some light on its Canadian counterpart, which is the least underperforming currency against the greenback so far this quarter, and the only currency to have rallied against the USD over the last six months.

We anticipate fresh buying USDCAD later this evening when Bank of Canada Deputy Governor Timothy Lane delivers a speech at 15:05 Eastern (20:05 BST), titled “Are We There Yet?”, asking whether the the US and Canada have reached a level of full equilibrium after the Global Financial Crisis. As it has been inferred by BoC governor Poloz, Mr. Lane is likely answer the question with a straight “No” even when recognizing rising employment and persistent stability in the housing sector.

Waning loonie net longs

This week’s unexpected decline in July retail sales contributed to further losses in the loonie against USD and JPY. Taking a look at futures speculators’ net longs in CAD vs USD in the Chicago Mercantile Exchange, we note a 60% decline in net CAD longs from the August high, to 7,544 contracts.

The bullish case for the loonie remains highlighted by the trade pass- through from its recovering southern border, which highlighted our bearishness in NZDCAD and GBPCAD made in previous notes. We expect further buying of the dips in CADJPY, targeting 99.80s and renewed pressure on NZDCAD, eyeing 0.85. Meanwhile, USDCAD’s persistent uptrend within the 2 ½ year channel, suggests a gradual accumulation of interest towards the 1.13 before quarter-end.

 

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024