CAD: Second best major currency this year – BBH

Research Team at BBH, notes that the Canadian dollar is the second best major currency this year and has appreciated by 8.5%, compared with the yen's nearly 10% gain.

Key Quotes

“However, the contrast between the Canadian response and the Japanese response is stark. Whereas many Japanese officials are worried, Canadian officials have had opportunities to protest and they haven't. Yesterday, Bank of Canada Governor Poloz was explicit. He was not concerned about the recent strength of the Canadian dollar. Instead, he suggested that volatility in the emerging markets was the biggest risk.

In the initial move yesterday, the US dollar rose to CAD1.30, an important technical area and also corresponds to the 20-day moving average. The US dollar reversed lower and fell through the pre-weekend low near CAD1.28. The greenback's losses have been extended to just beyond CAD1.2750 today. The CAD1.2675 area, which is retracement objective of the US dollar's rally from 2011 through earlier this year, is the next important technical target.”