CAD's position as a darling for international investors may soon be coming to an end, says Canada's Velocity Trade. The ongoing fiscal challenges in Europe, a lack of encouraging news form China and a lagging US manufacturing sector are weighing on the Canadian dollar. While the $15B CNOOC-Nexen deal offers CAD short-term support, global demand for international commodities would need to pick up to for CAD to maintain its appeal, VT says. But with CNOOC-Nexen providing modest CAD strength, Velocity recommends that corporate USD buyers remain disciplined and scale orders at lower levels until the deal is approved.
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