USD/CAD: New year-end target revised higher to 1.32 – NFB
|The National Bank of Canada revised its year-end target for the USD/CAD pair from 1.27 to 1.32. however, they warn that the reopening of the Chinese economy, coupled with the disruption of commodity supplies due to the war in Ukraine, will help limit the depreciation of the Canadian Dollar.
Weak Canadian GDP = BoC pause
“While job creation remains strong, a lacklustre GDP report and slower than expected inflation point to a divergence in monetary policy between Canada and the US. While our new spread forecast is not good news for the Canadian dollar in the near term, we still believe that the reopening of the Chinese economy, coupled with the disruption of commodity supplies due to the war in Ukraine, will help limit the depreciation of the CAD.”
“Under our new US scenario for growth and interest rates, we see USD/CAD lingering in the 1.36-1.39 range through the first half of 2023, before making comeback in the second half of the year when the Fed finally ends its tightening campaign. Our new year-end target is 1.32 (1.27 previously).”
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.