Forex Flash: Pro-risk backdrop in H1 to limit CAD losses against the USD – TD Securities

FXstreet.com (Barcelona) - Given that the CAD has one of the tightest correlations with the performance of risk assets among the G-10 currencies, the risk environment remains a key consideration: "So far this year, risk has trumped uncertainty and "safe haven" assets (such as bonds) have underperformed stocks", meaning a constructive backdrop for the CAD, "which maintains a stronger correlation with the S&P 500's performance (+70%) than it does with crude oil or short-term Canada-US spreadsboth in the +45% region currently", wrote analysts Shaun Osborne and Greg Moore. "We think investors are likely to remain positive on risk assets as broader crisis concerns abate (at least for now)", they added, pointing to easing central banks and seasonal trends favoring risk assets in H1. "The pro-risk backdrop should help underpin equities and limit CAD losses against the USD", they concluded, expecting the USDCAD gains to remain limited to the upper 0.99 zone for now, while key support remains at 0.9815/25.