USD/CAD likely ambles sideways into 2018 - Westpac
|In view of Richard Franulovich, Research Analyst at Westpac, USD/CAD likely ambles sideways into 2018, and 1.26-1.30 is likely going to be the range but as growth continues to forge ahead, BoC confidence that the economy can weather more hikes will increase. That should see USD/CAD eventually break lower and retest the 2017 lows around 1.2000 in 2018, he further adds.
Key Quotes
“The BoC has a lukewarm tightening bias - further hikes will be required over time but the Bank will be cautious.”
“Encouragingly, key releases have begun to surprise on the upside lately, including GDP, trade and jobs, matching the signals from our very depressed data pulse (i.e. all the bad news is out).”
“Our base case is still intact: risks to both the BoC and consensus projection for 2.1% growth next year are to the upside given Trudeau’s fiscal stimulus is still washing through the economy, US growth prospects are firm and oil prices are at 2 ½ year highs.”
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