Forex Flash: USD/CAD could face pullbacks in H1 – Danske Bank

By FXstreet.com | January 24, 2013 AAA

FXstreet.com (Barcelona) - The Loonie is hovering over the parity level against its fellow neighbour on Thursday, after BoC's M.Carney looked unusually dovish in yesterday's meeting, despite leaving the repo rate unchanged at 1.0%. He stated that a future rate hike would now be less imminent, after affirming that the Canadian economy is navigating well below its full capacity.



"Unsurprisingly, USDCAD surged on this, now trading around parity. While the dovish BoC was certainly a surprise to us and the market, we still like to be short USDCAD in H1 as the relative monetary policy outlook remains in favour of the Loonie, even with Carney leaving for the Bank of England later this year", stressed Senior Analyst C.Tuxen at Danske Bank.



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