Citi Group strategists said on Wednesday that they have stopped out of their short USD/CAD recommendation after the Federal Reserve appeared more hawkish than expected. According to Sina Finance, the team led by Daniel Tobon said they initially entered the trade on September 2, when they expected the Fed would not be more hawkish than market pricing and the Bank of Canada sounded more hawkish at the time.
The strategists said their view on the Fed was wrong, and Wednesday's meeting lifted expectations for further rate increases, pushing the U.S. dollar higher. On September 2, the team said it was short USD/CAD at 1.3854, with a target of 1.35 and a stop-loss at 1.3990; by Wednesday afternoon in New York, USD/CAD was trading around 1.3990, up 0.5% on the day.