According to Richard Franulovich, Head of FX Strategy at Westpac, USD/CAD unlikely to trade sustainably above 1.32 in coming weeks.
“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.”
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.