12 May 2015
USD/CAD seen higher medium term – Rabobank
FXStreet (Edinburgh) - In the opinion of Jane Foley, Senior FX Strategist at Rabobank, the pair is expected to resume its upside along with expectations of the Fed hiking by year end.
Key Quotes
“The BoC has decided to look through “the effects of the recent depreciation of the CAD”.
“The market has inferred that the BoC is not positioning itself to follow its January ‘insurance’ interest rate cuts”.
“Together with the recent broad-based sell off in the greenback and higher oil prices, this has supported the CAD and USD/CAD has plunged over 6% between mid-Mar and late Apr”.
“That said, March trade data highlighted a widening in the deficit to a record C$3 bln led by a slump in energy exports”.
“These data should hamper further upside potential for the CAD although the outlook will remain dominated by oil prices”.
“Since we look for a Fed rate hike in Dec, we expect USD/CAD to push higher in the months ahead”.
Key Quotes
“The BoC has decided to look through “the effects of the recent depreciation of the CAD”.
“The market has inferred that the BoC is not positioning itself to follow its January ‘insurance’ interest rate cuts”.
“Together with the recent broad-based sell off in the greenback and higher oil prices, this has supported the CAD and USD/CAD has plunged over 6% between mid-Mar and late Apr”.
“That said, March trade data highlighted a widening in the deficit to a record C$3 bln led by a slump in energy exports”.
“These data should hamper further upside potential for the CAD although the outlook will remain dominated by oil prices”.
“Since we look for a Fed rate hike in Dec, we expect USD/CAD to push higher in the months ahead”.