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#SaxoStrats
Today's edition of the Saxo Morning Call features the SaxoStrats team discussing the continuing weakness of the US dollar as commodity prices recover ground and in the wake of key US equity indices hitting all-time highs Thursday.
Squawk / 05 August 2015 at 12:38 GMT
Hi Mr O'Neill, i think the international merchandise trade and export numbers suggests maybe Canadian economy is not crashing. Isn't that possible?
4y
yuiyui yuiyui
And what if oil prices don't go down further
4y
Michael O'Neill Michael O'Neill
Good Morning: The data certainly raises a speed bump on the bullish USDCAD view. In fact, it could be a sign that perhaps, the Canadian 2nd half recovery, which was widely expected back in March, is starting to occur. A better than expected employment report on Friday would really wake up the USDCAD bears.. And if oil finds a bottom, like Goldman and others say is around $42.00, then my call for 1.45 will suck.-big time.
However, the election with polls showing the NDP in the lead, should limit Canadian dollar gains.
4y
yuiyui yuiyui
I really don't understand how the markets would have such a big kanipshin over the elections. My take is that most of the movement would occur prior to the election on "uncertainty" and totally fickle on data at that. I have long thought that the biggest buyers and sellers of CAD are the Canadian banks and the politics are probably important there.
I am long USDCAD but i am very cynical to be sure and perhaps the mood of the market is a wait and see therefore the government and the economy would slowly unravel market attitude.
4y
Michael O'Neill Michael O'Neill
The elections are not really that big a deal, although a NDP majority would be a different story. They are just something to trade around for intraday.
FYI, the Canadian banks are not the biggest players in spot USDCAD trading and haven't been since the mid- nineties. The biggest traders are the hedge funds/Pension funds, Sovereign wealth funds etc and those accounts are major clients of the global Top 10 banks. Canadian banks aren't in that league. In fact, fewer and fewer banks even run much in the way of positions any more, they are content to quote and cover with a mandate to not lose money.
Having said that, the Canadian banks are very good at trading USDCAD, they just aren't the biggest players.
4y
yuiyui yuiyui
WOW! that is a great piece of information, i really appreciate that. Thanks
4y
Michael O'Neill Michael O'Neill
Anytime.

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