USD/CAD unlikely to trade sustainably above 1.32 - Westpac
According to Richard Franulovich, Head of FX Strategy at Westpac, USD/CAD unlikely to trade sustainably above 1.32 in coming weeks.
Key Quotes
“NAFTA 2.0 has lifted a considerable cloud over Canada and the BoC’s path on rates, the latter almost certain to hike Oct 24. That is heavily discounted with OIS pricing in a 92% probability but the BoC may well signal a faster pace of normalisation for 2019, nudging markets in the direction of four hikes (versus +50bp in 2017 and +75bp in 2018).”
“Markets have already reprofiled BoC expectations after the trade deal announcement but it has further to run with +65bp priced in for all of 2019.”
“Some pockets of weakness in the latest run of data including weaker PMIs, softer full-time employment and weak housing starts but the underlying growth profile remains healthy.”
“USD/CAD risks multi-week still skewed to lower levels.”
Author
Sandeep Kanihama
FXStreet Contributor
Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.
