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6 Mar 2013
Forex Flash: USD/CAD to trend higher in the coming weeks - BBH
The Canadian dollar has been the second weakest currency against the US dollar since mid-January, as noted by the BBH analyst team. "With a 4.3% decline, it is only exceeded by sterling's 6.2% decline".
"We have noted that the net speculative position has turned to a net short Canadian dollar position for the first time since last August", BBH says. "BOC Governor Carney's timing in going to the UK may be prescient as Canada's financial challenges with housing market valuation issues, household debt levels, and potentially deflationary impulses all following a credit downgrade of the major Canadian banks in late January".
Against this backdrop, the BBH team projects potential for the US dollar to continue to trend higher to CAD1.0450-CAD1.0500 in the coming weeks.
"We have noted that the net speculative position has turned to a net short Canadian dollar position for the first time since last August", BBH says. "BOC Governor Carney's timing in going to the UK may be prescient as Canada's financial challenges with housing market valuation issues, household debt levels, and potentially deflationary impulses all following a credit downgrade of the major Canadian banks in late January".
Against this backdrop, the BBH team projects potential for the US dollar to continue to trend higher to CAD1.0450-CAD1.0500 in the coming weeks.