USD/CAD: A test of 1.30 in the coming weeks is on the cards – ING
|Economists at ING expect the USD/CAD to enter a sustainable downside path in the second half of the year. However, the pair could test 1.30 in the coming weeks.
CAD may lag other commodity currencies such as AUD and NZD
“A BoC-Fed rate gap of -50 bps (if the Fed hikes to 5.0%) does limit the downside potential of USD/CAD. However, there is a chance that the Fed cuts rates more aggressively in the second half of the year, and that is when USD/CAD could stabilise on a more solid downward path. Until then, it is possible that CAD may lag other commodity currencies such as AUD and NZD as it can only partly benefit from China’s improved growth story and suffers from domestic and US negative growth re-rating.”
“A test of 1.3000 in the coming weeks is surely possible in USD/CAD, but would likely be due to either more idiosyncratic USD weakness or rising oil prices.”
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