Neutral
TD Securities forecasts CAD to gain prominence as a global carry funding currency.
TD Securities suggests that the Canadian Dollar (CAD) is poised to become a more significant global carry funding currency, with its carry-to-volatility profile now comparable to the Japanese Yen (JPY). This shift follows recent U.S. tariffs, which have led to a rally in USD/CAD, aligning with TD Securities' year-end forecast of 1.39. However, they anticipate potential bearish catalysts in the near term as tariff impacts influence economic data and market sentiment, potentially overshadowing the Bank of Canada's recent hawkish stance.
Key points
- TD Securities highlights the Canadian Dollar's potential rise as a global carry funding currency, noting its carry-to-volatility profile is now comparable to the Japanese Yen.
- The recent U.S. tariffs have led to a rally in USD/CAD, aligning with TD Securities' year-end forecast of 1.39.
- TD Securities anticipates potential bearish catalysts in the near term as tariff impacts influence economic data and market sentiment, potentially overshadowing the Bank of Canada's recent hawkish stance.
Sources
AI-generated from public news sources. Not financial advice.
