MS: bullish on USD/CAD
The Bank of Canada will announce the results of its meeting at 14:00 GMT. Analysts at Morgan Stanley believe that the regulator may remain on the dovish side keeping Canadian dollar under pressure.
Indeed, at the end of the last week Canada released weaker-than-expected labor market data. The number of employed contracted by 9.4K, while the unemployment rate increased to 7.1%. “Weakness in Canadian leading indicators points to a less favor picture for the Canadian employment picture and the CAD”, said MS. The bank recommends buying USD/CAD with initial target at 1.0815. A further move above this level will open the way to the medium-term target at 1.1200.
USD/CAD has been recently supported by the line since September 2012 in the 1.0610 area and recovered to 1.0750.
Chart. Daily USD/CAD