USD/CAD to move towards 1.2550 over the next three months – Credit Suisse

The Canadian dollar closed 2020 near a three-year high versus the US dollar. Drivers of medium-term strength remain in place but analysts at Credit Suisse prefer to sell USD/CAD rallies for now.

Key quotes

“Over the next three months, we continue to see potential for USD/CAD to move towards our 1.2550 target, as the fundamental drivers of strength remain in place. High fiscal support to the growth outlook from the Trudeau administration. Rising housing prices suggest low potential for dovish repricing of BoC expectations. Proactive carbon tax initiative in Q4 2020 reduces the potential for long-term squabbles over environmental matters with the incoming US administration. High covid vaccine procurement numbers put Canada at an advantage vs other G10.” 

“The tactical outlook is not very attractive, due to the recent strength in the Canadian oil sector is the product of pipeline construction progress, and the stance on key projects of incoming US administration is yet unknown. COVID-19 infection surge in December drives risk of dovish policy surprise from BoC at upcoming 20 January meeting. This leaves us for the time being more willing to sell rallies in USD/CAD to 1.2900, than to engage immediately with USD/CAD downside.”


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. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD hits fresh one-month low amid souring market mood

EUR/USD has been extending its falls and dips below 1.21 as US retail sales badly disappointed and the worsening mood is supporting the safe-haven dollar. Markets digest Biden's stimulus plan. US Consumer Sentiment declined to 59.2 points. 


GBP/USD retreats toward 1.36 amid fresh dollar strength

GBP/US has pared its gains and falls toward 1.36 as the dollar gains ground. The UK economy shrank by 2.6% in November, better than estimated. The UK is ramping up its vaccination campaign and PM Johnson is pressured to ease the lockdown. 


Gold extends sideways grind near $1,850

The XAU/USD pair registered small daily gains on Thursday but struggled to extend its recovery amid a lack of significant fundamental drivers on Friday. As of writing, the pair was up 0.15% on a daily basis at $1,849.

Gold news

Forex Today: Markets “sell the fact” on Biden's stimulus, dollar rises, retail sales eyed

Markets are on the back foot after Biden hinted about tax hikes while introducing stimulus. The safe-haven dollar is edging higher despite Powell's pledge to keep monetary policy accommodative. 

Read more

DXY breaks above key downtrend, eyes move above 91.00

USD has been strongly supported on what has shaped up to be a very much risk off final trading day of the week. Most G10/USD pairs have seen significant weakness, aside from CHF/USD and JPY/USD, given that the two currencies are also considered “safe havens”.

US Dollar Index News