Richard Franulovich, head of FX strategy at Westpac, points out that while CAD is the strongest currency against the USD so far in 2019, CAD has not fully capitalised on those positives in the last three months.
“The bulk of CAD’s outperformance occurred in H1 2019 but yield spreads have pointed to ongoing outperformance in Q3.”
“Trade tensions and slowing global growth account for the bulk of the decoupling from yield spreads and as the slide over suggests, that is worth at least US5 cents.”
“The rebound in domestic activity has run its course but any moderation likely still leaves activity advancing close to trend, in line with BoC expectations. Against that backdrop the BoC will remain sidelined and another leg of CAD outperformance is on the cards. Sell USD/CAD into 1.34.”
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.