USD/CAD looks to 1.4000 in three months’ time – Goldman Sachs
|Analysts at Goldman Sachs revised their down their outlook for USD/CAD in a three-month horizon while upped for the 12-month period.
Key quotes
“USD/CAD’s 3-month forecast is now at 1.40 vs. the earlier projection of 1.42.
Cautious on CAD in the next quarter due to the extent of its recent rally.
6-month forecasts for USD/CAD seen at 1.37, unchanged from the previous forecast.
12-month rate upped to 1.32 vs. the previous forecast of 1.30.
USD/CAD broke below a few key levels last week as a pro-risk rotation across markets supported higher-beta currencies. But we continue to expect any further rally to be short-lived.
The Bank of Canada will likely ease policy in the coming months, and Canada still has domestic fragilities-housing market risks, energy sector recession-as well as other less favourable fundamentals than other economies with similar currency drivers (e.g., NOK).”
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