The post-Brexit trading range in USD/CAD has been "just" 3.2%, among the narrowest in the G10. In our view, this relative insensitivity to the EU/UK headlines offers an opportunity to express a fundamental view in a more risk-neutral way.

We are bullish on USDCAD as we see the forces that supported the Canadian currency in H1 (rising oil prices, receding BoC easing expectations and an unwind of short positioning) as largely reversing in the second half of the year. Furthermore, US politics are a particular risk factor that may ultimately turn out to be more important than Brexit, given the ramping up of protectionist rhetoric and open criticism of NAFTA from one of the presumed Presidential candidates.

We remain long USDCAD via a ratio call spread in our portfolio.