26 Mar 2015
USD/CAD year-end target at 1.33 – Scotiabank
FXStreet (Edinburgh) - In the opinion of Camilla Sutton, Chief FX Strategist at Scotiabank, the pair could head towards the 1.33 level in the last part of 2015.
Key Quotes
“From here there are three major drivers of CAD: 1) oil prices; 2) BoC and Fed policy developments; and 3) the broad USD move. The bulk of CAD depreciation has likely occurred, but we expect further weakness to materialize before year-end”.
“The domestic backdrop in Canada has deteriorated as oil prices have fallen and uncertainty has risen. Inflationary pressures have eased, while employment — where gains were already disappointing — is likely to soften”.
“Central bank policy has shifted towards data dependency, increasing the importance of employment and inflation releases. The Fed is expected to enter a hiking cycle, while the BoC is expected to maintain low rates and eventually succumb to a second interest rate cut”.
“CAD is expected to depreciate into year-end; we hold an end of year target of 0.75 (or in USDCAD terms 1.33)”.
Key Quotes
“From here there are three major drivers of CAD: 1) oil prices; 2) BoC and Fed policy developments; and 3) the broad USD move. The bulk of CAD depreciation has likely occurred, but we expect further weakness to materialize before year-end”.
“The domestic backdrop in Canada has deteriorated as oil prices have fallen and uncertainty has risen. Inflationary pressures have eased, while employment — where gains were already disappointing — is likely to soften”.
“Central bank policy has shifted towards data dependency, increasing the importance of employment and inflation releases. The Fed is expected to enter a hiking cycle, while the BoC is expected to maintain low rates and eventually succumb to a second interest rate cut”.
“CAD is expected to depreciate into year-end; we hold an end of year target of 0.75 (or in USDCAD terms 1.33)”.