Bank of America Global Research outlines the latest signals from its FX Scorecard.
"By magnitude of signal, our strongest cross trade is long CADCHF (+9), followed by short EURCAD (-8). Both of these are pro-risk trades. Notably, both are also highly correlated to energy (emphasis: oil) prices (Exhibit 3, Exhibit 4)," BofA notes.
"From a terms of trade perspective, Canada benefits from higher energy prices due to its status as an energy exporter, whereas economic effects for Europe are negative," BofA adds.