CAD: All key underlying positives still in place - Westpac

Sandeep Kanihama FXStreet Contributor

Richard Franulovich, Research Analyst at Westpac, suggests that viewing recent CAD weakness as a purely corrective affair, with all the key underlying positives still in place.

Key Quotes

“Markets continue to heavily favour an Oct 25 BoC follow up hike (80% priced) vs Sep 6 (28% priced), markets concluding that fresh MPR projections at their Oct meeting make that a more suitable date. But why wait? BoC officials have gone out of their way to make their intentions abundantly clear - insurance easings of 2015 have overstayed their welcome – and the data since their 12 July hike their has continued portray resilience.”

“With oil prices largely steady in recent sessions and markets underpricing Sep 6 BoC hike odds CAD weakness looks unwarranted, especially vs the likes of EUR and AUD. Admittedly leading growth indicators are cresting but that is not a trade for today.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

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