Dollar/CAD has been rocking and rolling up and down on recent comments from Poloz. Can the pair continue higher or not? Here are two opinions:

Here is their view, courtesy of eFXnews:

CAD: Weak CAD Not For Long; Fade USD/CAD Into 1.36 – ABN-AMRO

Overnight, the Canadian dollar (CAD) strengthened by more than one cent to 1.3280 against the US dollar after Bank of Canada (BoC) governor Poloz told lawmakers in Ottawa that the best plan for the central bank is to wait for the next 18 months or so. This supported the CAD as market speculation that the BoC may resume its easing cycle has increased recently. However the recovery in the CAD faded after governor Poloz clarified that the 18 months reference was in relation to when the output gap is expected to close, rather than the outlook for monetary policy.

We expect the Canadian dollar to recover to around 1.27 against the US dollar in 2017 given our view that crude oil prices is likely to firm (around USD 65 to USD 70 per barrel) next year. Sentiment in the CAD should also improve as financial markets price out (currently 30% chance) a rate cut next year.

We favour fading the current positive momentum in USD/CAD towards 1.36.

Fade USD/CAD Into 1.34; Look To Buy EUR/USD Near 1.08 – TD

The USDCAD thrill ride persists. Notably, we are now back above 1.33 following the overnight dip to a low near 1.3280.

We still see scope for continued CAD underperformance given the BoC rate cut theme has further room to run. The shift in rate differentials has seen our USDCAD equation inch higher, suggesting it is slightly overvalued. We see strong resistance ahead of 1.34 (upper end of our valuation band) so would look to fade there. Consistent with the weaker CAD theme in the majors we also like EURCAD higher.

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Market positioning has seen a notable shift over the past few months. The USD is now flat after reaching record shorts earlier in the year. This change in positioning reflects in markets focus on December rate hike, diminished political uncertainty in the US (and possible fiscal support) and a potential drop in FX reserves from countries like China that have recently seen a drop in reserve flows. The latter could reflect a drawdown in other major currencies for the greenback.

…We think this leaves the USD confined to its recent range but are cautious about chasing the rally at current levels. Our highfrequency models favor some upside in European currencies as both SEK and GBP look cheap.

We also like to think there is value in long EUR positions near 1.08.