USD/CAD forecast at 1.31 in three months – Danske Bank

Matías Salord FXStreet

The USD/CAD pair will likely move to the upside over the next months according to analysts at Danske Bank. They forecast the pair at 1.36 in a twelve-month horizon.

Key Quotes:

“CAD has over the last month risen on the global setback to risk and Bank of Canada (BoC) disappointing market expectations. At the January meeting markets priced a higher than 50% likelihood of a rate hike yet BoC kept its guidance that the first hike will come in the “middle quarters” of 2022. While we cannot rule out a hike at the interim March meeting we still think the big meeting in April is the most likely time for the first hike.”

“We still regard relative rates to be a positive for USD/CAD and we pencil in more topside to the cross from our view on the external environment.”

“We still like to treat USD/CAD as a low beta version of USD/NOK, We now forecast USD/CAD at 1.29 in 1M (from 1.25), 1.31 in 3M (from 1.29), 1.33 in 6M (1.32) and 1.36 in 12M (1.33).”

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

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