Canadian dollar not expected to post any further significant gains against the US dollar, event risks lie ahead

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Published on Wednesday, 13 June 2012 13:17

Written by Rob Samson

"We still reckon with limited downside risk in the next few days and feel that current USD levels are a buy" - Shaun Osborne at TD Securities.

The Canadian dollar (Currency:CAD) has drifted higher against the US dollar in recent days, but the moves are not forecasted to last by analysts at TD Securities.

The pound Canadian dollar exchange rate is 0.03 pct lower at 1.5972, the US dollar vs Canadian dollar exchange rate is 0.12 pct up at 1.0276, and the Australian dollar vs Canadian dollar exchange rate is 0.19 pct up at 1.0238.



"USD/CAD’s drift back to the mid 1.02 area in the past 24 hours should not extend much further in our opinion. Funds are right in the “gap” zone opened up after the weekend moves and this should be support for the market in the near-term. We still reckon with limited downside risk in the next few days and feel that current USD levels are a buy, risking just below 1.02," says Osborne.

The US dollar has fallen back as markets edge higher, but there is a big event risk on the horizon in the form of the Greek elections.

(We have updated our IMT site with the latest FX forecasts, access is Free via this Facebook gateway).

The data calendar picks up a little today, with US PPI and retail sales (weaker gasoline prices will probably weigh on the headline reading for both) but the markets are essentially on hold, hoping that some clarity on the European situation will allow for calmer markets and a better environment for risk assets.

"Unfortunately, there is no easy resolution to the broader Eurozone debt crisis and we still rather expect a bumpy ride for risk assets moving forward," says Osborne.