USD/CAD: Potential for a move toward 1.35 – TDS
|As Investors continue to digest Tuesday's surprise Fed rate cut and Super Tuesday results, TD Securities’ focus shifts to today's BoC policy decision. USD/CAD trades at 1.3350.
Key quotes
“TD looks for a 25bp rate cut from the Bank of Canada at the March policy meeting, in line with the market consensus, and think markets may be over-reaching with some looking for a dovish 50 bps move. This should still be enough to keep USD/CAD elevated.”
“While expectations for a 50bp cut were helped by the Fed's emergency rate cut, we believe the Bank's concern over financial vulnerabilities and their data-dependent nature support cutting rates by just 25bps until the Bank has more insight towards the economic impact of COVID-19 in Canada.”
“We see potential for a move toward 1.35 but do not expect a break into any new territory unless the BoC flags it stands ready to take rates lower again in April.”
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