J.P.Morgan: strategy to buy loonie
Analysts at J.P.Morgan expect oil price to advance. In their view, there can be no doubts that if the crisis in Libya continues, oil prices will stay high. Moreover, the specialists think that even if the tensions in the Middle East ease it will encourage economic growth, which will eventually stimulate demand for oil.
As Canada is the world's sixth largest oil exporter, J.P.Morgan is bullish on the Canadian dollar.
The bank recommends waiting until after Tuesday, when Canada is discussing its budget to eliminate the event risk. Then the strategists advise to sell US currency and buy loonie at 0.99 expecting that the pair USD/CAD will fall to 0.95. Stop orders should be placed in the 1.0150 area.
It’s necessary to remember, that the Canadian currency is highly correlated with the S&P 500 index, so loonie’s purchases mean betting on higher US stock market. J.P.Morgan, however, doesn’t worry about this saying that US stocks will rise as the American economy recovers.
Analysts at J.P.Morgan expect oil price to advance. In their view, there can be no doubts that if the crisis in Libya continues, oil prices will stay high. Moreover, the specialists think that even if the tensions in the Middle East ease it will encourage economic growth, which will eventually stimulate demand for oil.
As Canada is the world's sixth largest oil exporter, J.P.Morgan is bullish on the Canadian dollar.
The bank recommends waiting until after Tuesday, when Canada is discussing its budget to eliminate the event risk. Then the strategists advise to sell US currency and buy loonie at 0.99 expecting that the pair USD/CAD will fall to 0.95. Stop orders should be placed in the 1.0150 area.
It’s necessary to remember, that the Canadian currency is highly correlated with the S&P 500 index, so loonie’s purchases mean betting on higher US stock market. J.P.Morgan, however, doesn’t worry about this saying that US stocks will rise as the American economy recovers.
Comment