Nomura FX Strategy Research notes that CAD outperformed in the G10 this week, driven by positive economic momentum and the more hawkish turn by the Bank of Canada (BoC).

"The absorption of the past oil price shock has opened the door to the BoC reversing its 2015 insurance rate cuts. We continue to look for the BoC to start its rate hiking cycle in H1 2018, but the risk of an earlier move has increased.

The shift in market pricing and still-bearish market positioning point to further positive CAD momentum," Nomura argues.

In line with this view, Nomura maintains its long CAD exposure via USD/CAD 1.34- 1.31 put spread.

Source: Nomura Securities ResearchOriginal Article