USD/CAD to avoid a dive below 1.20 as central bank dynamics dominate – OCBC

FXStreet Insights Team FXStreet

The Canadian dollar has outperformed in 1H 2021. But economists at OCBC Bank expect the USD/CAD to be contained within a broad 1.20-1.25 in the coming months.

Difficult to see a break below 1.20

“It is difficult to see the BoC turning materially more hawkish for now, and existing expectations are already well-priced into the CAD. Coupled with the Fed also in the hawkish camp, further downside for the USD/CAD beyond 1.2000, while not explicitly ruled out, will be a tough ask.”

“Bias is for the USD/CAD pair to be contained within a broad 1.2000 to 1.2500 range.”

“The CAD strength is probably better expressed through the crosses.”

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FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

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