FXWire Pro Headline | February 14 2012 7:59 EST
Quotes from Standard Chartered:
-The CAD has underperformed the AUD and NZD, appreciating by only 2.21% against the USD. Such CAD underperformance within the dollar bloc is quite typical during global upturns.
-However, there are also important domestic factors at work. Elevated commodity prices remains a terms-of-trade positive for the CAD. However, they also have negative effects, with high fuel prices hurting household discretionary income.
-Moreover, the recent up-tick in the unemployment rate has been in contrast to the US and should limit Canada's wage growth near-term. Valuation is likely to prove an obstacle to further CAD gains, with the latest OECD PPP data suggesting fair value for USD-CAD at around 1.23.