Don’t miss this month’s edition of the George Davis Report, where George discusses the implications of a subtle shift in USD/CAD drivers.
What you need to know:
Last month we lowered our expected trading range in response to broader-based USD weakness and the BoC resuming interest rate hikes.
The latter development has prompted a subtle shift in the relative importance of the drivers of USD/CAD.
Furthermore, the recent break below 1.3224 points to a topping pattern and a shift lower in the trading range that has persisted since last September.
The upshot is that sellers of USD will now have to become more proactive in managing their hedging requirements.
Moves toward the 1.3350-1.3450 area are expected to attract selling interest for the time being.
For the trading range:
USD/CAD
Buyers
1.3000/1.3100
Sellers
1.3400/1.3500