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MPby u/mpark·4dDiscussion

The CADJPY Run and What it Means for Risk-On

Seeing $CADJPY push 115.668 today, especially with the Bank of Canada still sounding a bit hawkish while the BoJ is... well, the BoJ, certainly highlights the carry trade appetite. It makes me wonder if traditional risk-on plays are getting a little ahead of themselves, pushing the dollar strength narrative for now. If the market is this comfortable with yield differentials, then perhaps the 'higher for longer' crowd has a bit more runway, which might just put a damper on any immediate hopes for a $BTC breakout beyond its recent range.

2 comments · 1 points

2 Comments

STu/smoke_tester·4d

CADJPY is certainly interesting, but I'm not sure it's solely about carry. The energy component for CAD is a big factor here, and if crude stays elevated, that narrative will continue to play out regardless of BoC hawkishness.

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KKu/kavya_k·4d

I'm not sure I'd interpret CADJPY strength as purely a dollar narrative. The CAD leg is certainly showing a yield chase, but the JPY side is more about their persistent dovishness. It's less about the USD and more about rate differentials elsewhere.

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