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USD/CAD: Case for 1.40+ is stronger now – ING

USD/CAD observed volatility has eased back significantly, as the loonie seems to be trading again as an extension of US-growth sentiment – and is therefore more correlated with USD, ING's FX analysts Francesco Pesole and Chris Turner note.

The case for a return above 1.40 is now quite compelling

"May has started on a soft tone for CAD as Prime Minister Mark Carney’s first trip to meet Trump didn’t suggest that US-Canada tensions will abate soon. Renegotiations of the USMCA won’t be as quick as transcontinental trade deals, either for the US or Canada."

"The short-term risks are moderately on the upside for USD/CAD, as the pair’s short-term fair value still sits close to 1.42. Some risk premium on USD should remain, but the case for a return above 1.40 is now quite compelling, also as domestic data deterioration may prompt the Bank of Canada to cut rates again in June."

EUR/USD extends recovery as soft US inflation data keeps US Dollar on backfoot

EUR/USD moves higher to near 1.1250 during European trading hours on Wednesday, extending Tuesday’s gains.
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USD/JPY: Further USD strength is likely – UOB Group

US Dollar (USD) is likely to trade in a range between 146.70 and 148.20. In the longer run, further USD strength is likely, but it could first trade in a range for a few days; the level to monitor is 149.30, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
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