USD/CAD: Case for 1.40+ is stronger now – ING
|USD/CAD observed volatility has eased back significantly, as the loonie seems to be trading again as an extension of US-growth sentiment – and is therefore more correlated with USD, ING's FX analysts Francesco Pesole and Chris Turner note.
The case for a return above 1.40 is now quite compelling
"May has started on a soft tone for CAD as Prime Minister Mark Carney’s first trip to meet Trump didn’t suggest that US-Canada tensions will abate soon. Renegotiations of the USMCA won’t be as quick as transcontinental trade deals, either for the US or Canada."
"The short-term risks are moderately on the upside for USD/CAD, as the pair’s short-term fair value still sits close to 1.42. Some risk premium on USD should remain, but the case for a return above 1.40 is now quite compelling, also as domestic data deterioration may prompt the Bank of Canada to cut rates again in June."
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.