Pretty much the only thing that drives price is disagreement - one guy/gal buys, another sells and the circle of life continues
Yeah, disagreement rocks and should be celebrated!
The view from TD is that after the BoC the CAD is a sell:
(digression …. ICYhaven'tmissedit yet - the Bank of Canada meet today, Wednesday 11 July, I posted a preview here and will have more to come: Bank of Canada meet this week - preview)
Canadian Imperial Bank of Commerce FX and macro strategist Bipan Rai, though, is in the opposite camp:
- even a neutral statement from the bank will be taken as hawkish and spur loonie strength
- "We've seen this movie before. The market tends to be underweight the Canadian dollar into the Bank of Canada, then scrambles to cover shorts after it"
- "That could be what carries the momentum below the 1.31 handle and potentially toward 1.30."
Canadian dollar short squeeze in the aftermath, CINC citing large short positioning by Hedge funds & other large speculators (largest since June 2017 says CINC, citing Commodity Futures Trading Commission data covering the week ended July 3)
(CIBC remarks via Bloomberg)
