MUFG Research shifts its bias on CAD from bullish to neutral in the near-term.
"Our short-term USD/CAD valuation model takes into account both short-term yield spreads and the price of oil. It provided an accurate reversal signal that CAD weakness was overshooting over the summer. CAD undervaluation has since fully reversed," MUFG notes.
"While momentum still favours further CAD gains in the near-term, the risk/reward balance has become less favourable at current stronger levels," MUFG adds.