Andrew Grantham, analyst at CIBC, sees the USD/CAD trading in the lows 1.30’s during 2019 amid lower oil investment.
“One barrier to higher investment, and thereby more rate hikes and a stronger C$, was removed by the signing of the USMCA agreement. However, another took its place—the large spread between WCS and WTI oil prices and more recently lower global benchmarks. That spread has encouraged a weaker C$ compared to its past relationship with WTI. Oil sector investment was already starting to fall in the first half of the year, in contrast to the trend stateside.”
“That lower oil investment likely outweighs any spending made by the manufacturing sector now that trade uncertainty has eased, which could slow GDP growth, prevent the BoC hiking more than twice, and as such keep USDCAD in the low 1.30’s in 2019.”
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 securities. 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 Forex 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.