Back
29 Jul 2015
USD/CAD could see 1.32 in 9-months – Rabobank
FXStreet (Edinburgh) - According to Senior Currency Strategist at Rabobank Jane Foley, the pair could reach the 1.3200 handle by next spring.
Key Quotes
“Even though we are not pencilling in another BoC rate cut at this point we do see risk of USD/CAD pushing higher from current levels in the coming months.
“Concerns about the vitality of business investment in the US and the recent drop in US consumer confidence combined with concerns about Chinese growth all support our view that the FOMC will favour December over September to start normalising rates”.
“While a later start to Fed rate hikes this could subdue the appetite of USD bulls, it is still consistent with a broadbased uptrend in the USD in the coming months”.
“While the BoC is optimistic about the ability of non-energy industry to capitalise on the weakness of the CAD and lead the economic recovery later this year, the issue of oversupply of oil could be an issue for the Canadian economy well into 2016”.
“We have recently revised lower our short-term projection for oil prices and this bodes poorly for the outlook for the Canadian economy and the CAD”.
“Overall, it could be some time before the BoC follows the Fed with higher rates. A widening in interest rate differentials into 2016 is set to weigh on the CAD vs. the USD and we have revised up our forecasts for USD/CAD to 1.31 on a 3 mth view and to 1.32 by next spring”.
Key Quotes
“Even though we are not pencilling in another BoC rate cut at this point we do see risk of USD/CAD pushing higher from current levels in the coming months.
“Concerns about the vitality of business investment in the US and the recent drop in US consumer confidence combined with concerns about Chinese growth all support our view that the FOMC will favour December over September to start normalising rates”.
“While a later start to Fed rate hikes this could subdue the appetite of USD bulls, it is still consistent with a broadbased uptrend in the USD in the coming months”.
“While the BoC is optimistic about the ability of non-energy industry to capitalise on the weakness of the CAD and lead the economic recovery later this year, the issue of oversupply of oil could be an issue for the Canadian economy well into 2016”.
“We have recently revised lower our short-term projection for oil prices and this bodes poorly for the outlook for the Canadian economy and the CAD”.
“Overall, it could be some time before the BoC follows the Fed with higher rates. A widening in interest rate differentials into 2016 is set to weigh on the CAD vs. the USD and we have revised up our forecasts for USD/CAD to 1.31 on a 3 mth view and to 1.32 by next spring”.