13 Jan 2015
USD/CAD might reach 1.25 by Q2 2015 – Nomura
FXStreet (Barcelona) - The Research Team at Nomura anticipates USD/CAD to reach 1.25 levels by the second quarter of this year, and stabilise at the same levels as commodity prices increase.
Key Quotes
“We expect the BoC’s growth outlook to be revised lower by at least 0.3pp when it releases its Monetary Policy Report on 21 January. If we are correct, this means that growth in 2015 would be only slightly higher than potential. With the output gap closing at a slower pace, we doubt the BoC will be in a position to hike rates until 2016.”
“With the Federal Reserve expected to start normalising its monetary policy around mid-2015, the divergence in monetary policy paths should put further downward pressures on CAD.”
“We expect CAD to continue to depreciate in 2015 and believe that USD/CAD could reach 1.25 by the end of Q2 before stabilising around that level as commodity prices start to increase slightly again, as supply falls and global growth improves.”
“USD/CAD should remain around those levels and end 2015 at 1.25.”
Key Quotes
“We expect the BoC’s growth outlook to be revised lower by at least 0.3pp when it releases its Monetary Policy Report on 21 January. If we are correct, this means that growth in 2015 would be only slightly higher than potential. With the output gap closing at a slower pace, we doubt the BoC will be in a position to hike rates until 2016.”
“With the Federal Reserve expected to start normalising its monetary policy around mid-2015, the divergence in monetary policy paths should put further downward pressures on CAD.”
“We expect CAD to continue to depreciate in 2015 and believe that USD/CAD could reach 1.25 by the end of Q2 before stabilising around that level as commodity prices start to increase slightly again, as supply falls and global growth improves.”
“USD/CAD should remain around those levels and end 2015 at 1.25.”