Analysts at TD Securities explained that after a knee-jerk move lower following the BoC rate hike, USD/CAD made a significant turnaround.
“Given the escalation in global trade tensions and a curve already reflecting “gradual” tightening suggests that the CAD’s return profile remains asymmetrically tilted to the downside. We stay long USD/CAD.”
“USD/JPY continues to defy traditional cross-asset correlations with an impulsive break through trend resistance located near 111.50/60.”
“The JPY continues to trade in sympathy of Asian EMFX.”
“Though our HFFV estimate suggests USD/JPY should be trading lower from here, we are mindful that this break could heighten positioning risks and keep the pair elevated for now.”
Despite a massive 12m bbl inventory draw, WTI crude (-4.9%) faced a delayed reaction to the escalation in trade tensions, while news that a severe Libyan outage was coming to an end also dragged Brent crude (-6.1%) sharply lower.