Look for short USD versus CAD and NOK – Goldman Sachs
|In its latest note, Goldman Sachs highlights upcoming policy divergence between central banks from Canada, the US and Norway.
The US investment bank expects the Norges Bank, Norway’s central bank, to inflate rates in Q4 2021 while also expecting the Bank of Canada (BOC) to begin tapering in April and raise rates in Q3 '23.
The report also mentions heavy divergent rate paths among the close neighbors to suggest further weakness of the US dollar (USD) against the Canadian Dollar and the Norwegian Krone (NOK).
The reason for the vast difference in the rate, cited in the note was, “probably due to factors like cross-border currency hedging and fundamental domestic factors driving the rate differential.”
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