USD/CAD: One of the most successful banks on this pair maintains its bullish target at 1.40

In a note published Friday, Morgan Stanley continues to advise buying the USD/CAD:

"The rate markets do not anticipate any new flexibility at all on the part of the BoC, which is a major disconnect given the low energy prices and signs of a bearish reversal in the manufacturing sector.

In short, we have a hard time seeing how Canada can continue to display growth in the medium-term. With the Fed starting its tightening cycle, we believe that the BoC may have no other choice but to go in the opposite direction."

Morgan Stanley therefore maintains its long USD/CAD position from 1.3287, with a stop at 1.3050 and a target at 1.40. For the record, according to historical data Morgan Stanley is the second most successful bank on the USD/CAD, with a total of 1156 pips cashed in on the pair since the beginning of the year.